The Google acquisition of Israeli social navigation app Waze for $1.03 billion is one of the largest high-tech acquisitions in Israeli history (The all time record goes to Cisco for buying NDS in 2012 for the price of $5 billion). The interest of international tech giants in Israeli startups is nothing new. With more startup companies per capita than any other country, Israel is widely hailed as the Startup Nation. As we know, Israel is more than happy to sell its startups to large entities knocking on its door. According to the IVC Research Center, 2012 was one of Israel’s most successful years for high-tech M&A in the past decade, yielding $9.95 billion in exits – 88% above 2011 levels.
When all is said and done, it’s not every day that you hear about titans like Google and Facebook going head to head in a race to buy out a company at these valuation levels. In the end, Google won the war for Waze by letting the company stay in Israel. It was reported that the Facebook tie-up fell apart over Facebook’s insistence on Waze moving its Israel-based operations to Facebook’s HQ in California.
So, with all the excitement and hype around the Google-Waze news, we thought this would be a great opportunity to take a look at the Israeli M&A environment up year-to-date in 2013 (excluding Waze).
Israeli M&A environment for 2013:
- There are currently over 250 multinationals with R&D centers in Israel
- For the first half of 2013, there were 18 M&A deals
- The average M&A deal was $144 million
- 5 deals scored over $10M but less than $200M
- 1 deal landed between $200M and $400M
- 3 deals closed at over $400M
Here’s a sector breakdown of M&A deals:
A look to the (near) future
Google’s acquisition of Waze puts Israeli technology back on the front stage of the international startup scene, signaling new growth for Israeli high tech. Until recently, most investors thought it would be impossible to build a billion dollar consumer company in Israel. This deal opened a new market for Israeli startups with interesting possibilities. We can look forward to the 2nd half of 2013 and expect to see an increase of M&A, both in number and in size.
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