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Israeli industry of innovation and venture capital: 2015 results, 2016 forecasts

by Administrator, on Feb 27
A comprehensive overview of the Israeli innovation and venture capital industry in 2015 and forecasts for 2016
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Market overview

In 2015 Israel's market was wonderfully stable: despite traditional difficulties with security, the country's credit rating remained at a high level. The international rating agency S&P confirmed Israel's credit rating at the level of A +, rated at A1 by Moody's, and A by Fitch, all with a stable outlook. "The state of the Israeli economy in 2015 significantly exceeded expectations", - states the Moody's report. The agency outlines the low budget deficit (2.15% instead of the projected 2.5% and the specified in the state budget 2.9%) as well as the decreased public debt to GDP ratio. According to the report, Israel is one of the two states with an investment rating that was able to lower the debt-to-GDP ratio between 2009 and 2015.

The latest data provided by the Ministry of Finance suggests that, as of the end of 2015, Israel's national debt dropped by 1.8% down to 64.9% of GDP. In total, over the past 10 years, the ratio of Israel's public debt to GDP was reduced by 17%. To compare, the ratio of public debt to GDP in Japan accounts for 245.9%, 104% in the USA, 93.7% in the euro zone, 70.7% in Germany.

In the Global Competitiveness Report published by the World Economic Forum annually, Israel rose to the third place in the sphere of innovations giving way only to Finland and Switzerland, with the US ranked fourth and Japan fifth.

Israel is also number one in the global ranking of the Swiss Research Institute IMD: the Israeli economy has earned top notch in three categories - costs in R&D as a share of GDP, the security of information networks and the level of innovations in the business. Besides that, Israel is the second highest in research, the fourth in business and investment development, and the seventh in market resilience to crises.

In the Bloomberg global innovation index Israel is ranked fifth in the rating of innovative states. South Korea, Japan, Germany, Finland and the United States had the lead respectively. Bloomberg niche ratings covering such aspects as R&D, intellectual property, the presence of IT-companies on the market and the availability of a highly skilled labor force, put Israel second only to South Korea.

Exports in Israeli high-tech sphere have grown by 5% since 2014 up to $37.5 billion. The key growth driver was the increase in demand for high-tech Israeli products (11% increase, $ 23.5 billion), while the Israeli demand for IT- services decreased by 3% to $14 billion. In total, the share of high technology in the Israeli export is now 41%, according to preliminary data from the Institute of export.

Israeli cybersecurity industry demonstrates a strong growth: in 2015 Israel exported goods and services in the sphere of cybersecurity accounting for over $3 billion in total. Final 2015 exports statistics has not been published yet by the Institute of exports, but analysts predict a 10% increase over 2014.

It is worth mentioning that the development of cyber security industry is on the list of Israel's national priorities. Thus, at the December meeting of the government Prime Minister Benjamin Netanyahu highlighted that cyber technologies development was considered a national priority: "Here we are world pioneers and leaders. We founded the National Cyber Headquarters, we are moving the IDF cyber units to Be'er Sheva, turning it into a center of cyber industry. We are taking additional steps at the national level. We will continue to invest and lead in the cyber field''.

The absolute authority of Israel in the global industry of innovations has frequently been the subject of speeches of world corporations’ leaders — and the year 2015 was no exception. Thus, in the course of his visit to Israel the Google chairman and founder of the venture fund Innovation Endeavors Eric Schmidt stated the following: "Israel is thriving in terms of innovation because you have a culture that makes it possible to question authority and to challenge everything - you don't follow the rules". "The influence that Israelis have on science and technology is tremendous; that’s why I’m here, and that’s why I invest here", - said Schmidt. Apple president Tim Cook who visited Israel for the opening of the new office of the company also highly appreciated Israeli innovations ecosystem. Cook outlined that Apple R&D center located in Herzliya is the second largest in the world in terms of the number of employees.

Venture capital

In 2015 Israel came in second only to the US among the countries that prefer investing in venture capital funds. Deloitte survey graded countries on a five-point scale. The United States gained the lead with a score of 4.17 points, then came Israel (3.90), Canada (3.60), China (3.53) and the United Kingdom (3.51). Russian Federation gained 1.82 points.

The Israeli start-up ecosystem received a projected high acclaim in the analytical study by Compass: in 2015 Tel Aviv was ranked fifth in the global start-up rating yielding to the Silicon Valley, New York, Los Angeles and Boston. Consequently, the Israeli start-up ecosystem was second best globally after the US. The study focuses on the fact that the Israeli start-up entrepreneurs are among the most experienced in the world: 49% of employees of the Israeli start-ups have already had experience in other start-up companies.

In 2015 about 1,400 new start-ups emerged in Israel, according to Geektime and Zirra joint study. The total amount of capital raised broke all records and reached $4.43 billion in 708 deals, according to the annual report of IVC Research Center and KPMG. This is 30% higher than the results achieved in 2014, when the Israeli start-up companies raised $3.42 billion in 690 deals.

The average amount of transactions in 2015 amounted to $6.3 million compared to $5 million in 2014 and an average rate of $4 million over the past 10 years.

Average amounts of attracted investments at the seed stage, as well as in series A and B rounds, also rose compared to 2014 when a typical seed round would close at $1.67 mio, at $5 mio in A round, and at $11,41 mio in B round. In 2015, these figures went up to $1.72 million at the seed round, $5,660,000 in the round A and $15.26 million in the round B.

The total volume of exits 104 Israeli start-up companies has reached $ 9.02 billion in 2015, which is 16% higher than the 2014 results. Analyst firm IVC notes that the average amount of exit grew to $87 million, which is 43% higher than the average figure over the past decade.

The total amount of M&A deals among Israeli start-ups has reached $7.2 billion, PwC Israel states in its annual report. A similar amount ($7.16 billion) is mentioned by the IVC. The growth of the M&A market since 2014 is 44%, an unprecedented figure.

Meanwhile, IPO activity slightly decreased, as compared to the year 2014: 8 Israeli start-up companies had their IPO estimated at $3.5 billion in 2015 - against $9.8 billion for 18 companies in 2014. Then again, a phenomenal figure in 2014 was largely due to the IPO start-up company Mobileye that accounted for $5.3 billion. Overall, in 2015 Israeli start-up companies raised $609 million through IPO. If at the time of the initial public offering in 2015 the total capitalization of the eight Israeli companies was estimated at $3.5 billion, by the beginning of 2016 it had reached $3.8 billion.

''The Israeli high-tech industry provides investors with an impressive flow of exits — for the fifth consecutive year the volume of exits of Israeli start-ups exceeds $5 billion," - says PwC Israel partner Rubi Suliman. - "Israel has strengthened its status as one of the key regions for international M&A transactions. In addition to the long-present in the Israeli M&A market Apple, Facebook, IBM, Intel, Microsoft and other corporations, in 2015 we observed new players, such as Amazon, ARM, Zynga. On top of that, Israeli companies such as Checkpoint, Mellanox, ironSource and Wix are also very active in mergers and acquisitions''.

The most active M&A player in the Israeli start-up market in 2015 was the Microsoft Corporation which acquired 5 Israeli start-up companies.

It should be pointed out that the internal Israeli M&A market is quite active: according to IVC data, 30% of the merger/acquisition transactions took place between Israeli companies. However, in 53% of transactions companies from the United States and Canada acted as buyers.

IT Enterprise Software became the leading segment by the exit volume, it accounted for $3.9 billion which is 43% of total exit amount of Israeli start-ups in 2015. Life Sciences came second with 16%, Internet was a close third with 15%.

18 Israeli venture capital funds have raised a total $1.02 billion in 2015, according to the annual report by the IVC Research Center prepared with the assistance of KPMG Somekh Chaikin. It should be noted that at the time of the final funds closure the total investments amount will rise by another $500 million. As a result, the year 2015 will become more successful for the Israeli venture capital funds than 2014 when the funds were able to raise $1.2 billion. The average volume of Israeli venture capital fund launched in 2015 currently amounts to $57 million. With the ultimate goal of raising capital fulfilled, the average size of the fund will have reached $82 million.

KPMG Somekh Chaikin Partner Ofer Sela emphasizes: "In the recent years we have seen changes in the LP structure of Israeli venture capital funds. Despite the fact that the Israeli institutional investors are increasing their presence, there is enough space in the market for investors from the US and the increasingly more active China. We also observe among Israeli wealthy individuals the tendency of entering the venture capital market. As far as the Israeli venture capital funds are concerned, on the one hand, we see that increasingly more of those long present in the Israeli market are reinvesting part of the profits, enlarging the available capital for their new funds. On the other hand, there has been a significant drop in investment cycles: those funds successfully formed in 2014 are planning to raise further investments as early as at the end of 2016".

As of early 2016, Israeli venture capital funds have over $2 billion for investments purposes. About $500 million of this amount is intended for first investments, and the rest is for further investments. IVC and KPMG expect that taking into account the amounts raised for the new Israel's funds, in 2016 Israeli VC will acquire over $700 million for first investments.

Top 10 new venture capital funds

1. Eucalyptus Growth Capital – $300 mio

The new venture capital fund Eucalyptus Growth Capital was founded by the top managers of the Israeli IT-industry and focused on the Israeli start-up companies at the later growth stages. In total Eucalyptus plans to invest in six companies with revenues over $30 million.

Eucalyptus partners are former Intel vice-president Dadi Perlmutter, former Allot President Rami Hadar and the founder of the Tamir Fishman investment group Eldad Tamir. The supervisory board of the fund was represented by the former Intel president Paul Otellini, the AMD ex-president Atiq Raza, the Mellanox president Eyal Waldman, and others.

2. USVP – $300 mio

The Venture Fund US Venture Partners (USVP) announced the closing of a new $300 million fund, called USVP XI.

The new fund will focus on investments into the US and Israeli start-up companies in the round A. The fund is focused on cyber security segment, enterprise software, consumer mobile solutions, e-commerce and healthcare. Such Israeli companies as Check Point, Imperva, Mellanox Technologies and Cato Networks were among previous USVP investments.

3. Pitango  – $250 mio

Israel's Pitango Venture Capital fund announced the closing of $250 million for the new Pitango Growth Fund.

Pitango Growth Fund will operate under the control of Isaac Hillel and Aaron Mankovski, in addition, Pascal Cagni, the founder of C4 Ventures and former Apple Europe vice-president, will join the new fund as a partner,.

Pitango Venture Fund was founded in 1993 and has raised over $2 billion worth of investments for management. Pitango has invested in more than 120 start-up companies.

4. OrbiMed Israel – $250 mio

The international biotechnological fund OrbiMed is planning to set up a second fund OrbiMed Israel. The new fund should be closed at the level of $200-250 million.

The first Israeli OrbiMed fund was founded with the support of the Office of the Chief Scientist in the Israel's Ministry of Economy. OrbiMed managed to attract $203 million for the fund, $48 million out of which was invested by the government. The new fund is planning to implement 12-15 deals with an average check for $5-20 million.

Israeli start-ups Given Imaging, SuperDimension, RedHill Biopharma, BiolineRX and InspireMD are among the notable exits of the first fund of OrbiMed Israel.

5. Viola Private Equity – $250 mio

Israeli investment company Viola Private Equity has announced the closing of a new $250 million fund Viola Private Equity II. Viola Private Equity is part of the Viola group of companies responsible for investments in start-up companies. The fund focuses on such sectors as e-commerce, cyber-security, financial technology, healthcare technology, as well as enterprise software.

The new fund will invest in 10 to 12 companies with an average check of $20-40 million. The first Viola Private Equity fund has invested in 12 companies, 3 of which have already made an exit: MobileAccess (acquired by Corning), Amiad Water Systems (has gone public) and Matomy Media Group (has gone public).

6. 83North – $200 mio

The Israeli unit of the Greylock Partners venture fund Greylock IL announced early in 2015 its re-branding and setting up a new $200 million fund. The new fund is called 83North, its headquarters are located in London and Herzliya. Today there are more than $550 million under 83North management.

Since 2006, the fund has invested in 36 start-up companies, including AeroScout (acquired by Stanley Healthcare), Hybris (acquired by SAP), Panoramic Power (acquired by Direct Energy), ScaleIO (acquired by EMC), Wanova (acquied by vmware), Zend (acquired by Rogue Wave), etc. Among the "parent" fund investments are the Greylock Partners  — Facebook, Dropbox, LinkedIn.

7. Infocomm – $200 mio

Infocomm Investments, a division of Infocomm Development Authority of Singapore, plans to carry out the first investments in Israeli start-up companies.

Infocomm Investments is a $200 million venture fund financed by the Government of Singapore. An average fund check in Israeli transactions will be $1-5 million.

The main focus of the fund is information security and financial technologies.

8. «Роснано» и Tsinghua Holding – $160 mio

JSC "Rosnano" is planning to establish a joint venture fund with Chinese investors which will invest in Israeli start-up companies.

This was announced by Russian Deputy Prime Minister Arkady Dvorkovich, according to Interfax. Tsinghua Holding owned by the endowment of Tsinghua University will become partner of "Rosnano" in the new fund, "Interfax" quotes a source familiar with the state-owned plans. Each party will contribute $80 million for the fund.

9. Glilot Capital Partners – $77 mio

The Israeli venture capital fund Glilot Capital Partners announced the launch of a new $ 77 million fund. The new fund is called Glilot II. The previous fund invested $30 million in 8 Israeli start-up companies, 3 of which have been taken over - Aorato, Insightera and Porticor.

Glilot II will focus on the seed and pre-seed stages in Israeli start-ups of cyber security and enterprise software segments. Glilot Capital Partners Fund was established in 2011 by Arik Kleinstein and Kobi Samboursky.

10. AltaIR Capital – $30 mio

Igor Ryabenkiy's Venture Fund AltaIR Capital announced the start of raising of $30 million for investment in Israeli start-ups. As before, the fund will focus on the seed stage startups. All in all, AltaIR plans to invest in over 50 start-up companies in Israel. Millhouse Capital fund will invest up to $10 million in a new fund AltaIR, which manages Roman Abramovich's assets.

Besides that, Israel launched a platform of syndicated transactions AltaClub allowing to co-invest in Israeli start-up companies together with AltaIR.

Deals of the Year

Top 10 exits

1. D+H takes over Fundtech – $1,25 bln

Israeli company Fundtech announced an acquisition by the Canadian corporation D+H. The transaction amounts to $1.25 billion.

Fundtech develops software for the banking sector. Its customers include Bank of America, Barclays, Coca Cola, DHL, Hilton, Unilever and others.

D+H specializes in financial technology. The company provides services for more than 7,000 banks, credit unions, and government agencies.

2. XIO Group takes over Lumenis – $510 mio

The International Investment Company XIO Group announced an acquisition of the Israeli company Lumenis. XIO Group offered Lumenis $14 per share, thus, the amount of the transaction was approximately $510 million in cash.

Lumenis specializes in the development, production and sales of lasers and laser systems for ophthalmic, surgical, dental, veterinary industries and "the beauty industry". Lumenis is headquartered in the industrial zone of Yokneam Israel. Affiliates in the United States are located in Santa Clara (California) and Salt Lake City (Utah); Branches are also present in the UK, France, Italy, Germany, Holland, Japan and Hong Kong.

4. Pitney Bowes takes over Borderfree – $395 mio

Israeli start-up company Borderfree announced its acquisition of the American corporation Pitney Bowes. The deal amounted to $395 million.

BorderFree Company is one of the leaders in e-commerce market in the United States and offers the US online retail stores a single electronic platform for managing international sales in more than 100 countries worldwide. The BorderFree platform completely delivers the store from addressing the issues of international shipping, customs clearance, brokerage services, etc.

Pitney Bowes is an American manufacturer of software and hardware products. It also provides services in the areas related to the paperwork, packaging, sorting and forwarding mail. It is one of the 87 companies included in the S&P 500 index since its inception in 1957.

5. Amazon takes over Annapurna Labs – $370 mio

In January 2015 the acquisition of Israeli start-up company Annapurna Labs by the Internet giant Amazon was reported. The transaction value has not been disclosed, but analysts estimate it at $350-370 mio.

Annapurna Labs produces high-performance processors. Amazon will create its own R & D-center based on the acquired company. A short time after the acquisition Annapurna Labs announced a new chip based on the ARM architecture named Alpine which will be produced under the Amazon brand. New 32-bit and 64-bit crystals will use  and ARMv7 and ARMv8 architectures respectively, which will provide high performance for secure data storage, video streaming, virtualization, applications, and other tasks. The maximum number of cores in the Alpine processors will be four.

6. Microsoft takes over Adallom – $320 mio

Microsoft has announced the acquisition of Israeli start-up company Adallom. The deal amounted to $320 million.

Adallom develops security solutions for cloud infrastructures. SAP, HP, LinkedIn and others are named among the clients of the Israeli startup. Adallom company was founded in 2012. The total amount of the capital raised, taking into account the latest round of investments, was $49.5 million.

All in all over 2015 Microsoft has absorbed 5 Israeli start-up companies and has taken the lead in the Israeli market of M&A.

7. Nielsen takes over eXelate – $200 mio

The Nielsen Corporation announced the acquisition of Israeli start-up company eXelate. The transaction amount has not been disclosed, but analysts estimate it at $200 million.

EXelate flagship product is a comprehensive data management platform and predictive analytics for marketing companies. EXelate monthly coverage exceeds 5 billion devices and users worldwide. Among the company's customers are Nielsen, MasterCard Advisors, Experian, IXI.

The eXelate company was founded in 2007. Since its inception, the company has raised $32 million of investment capital from venture capital funds Carmel Ventures, Menlo Ventures, Trident Capital and NewSpring Capital.

8. Infosys takes over Panaya – $200 mio

The Indian IT-company Infosys announced the acquisition of Israeli start-up company Panaya. The deal amounted to $200 million. Infosys announced its intention to turn Panaya Israeli office into its R&D center.

The flagship product of Panaya is a solution for managing enterprise CloudQuality Suite ERP-systems. Among the clients of the Israeli start-up are such companies as Coca Cola, Mercedes-Benz, Toyota, Peugeot, Renault, Volvo, Mazda, Siemens, Bosch, Panasonic, Xerox, Sony, Pioneer, Walmart and others.

Panaya was founded in 2006 by Yossi Cohen. The total amount of the capital raised during Panaya existence rises up to $59 million.

9. BlackBerry takes over WatchDox – $150 mio

Israeli start-up company WatchDox announced that it had been taken over by the Canadian telecommunications corporation BlackBerry. The transaction amount has not been disclosed, analysts estimate it at $100-150 million.

The flagship product of WatchDox is a platform for secure file sharing. BlackBerry is planning to open an R&D center in Israel based on the acquired start-up.

The WatchDox company was founded in 2008 by the CEO Mori Rafalin and the Vice President of Product Development Noam Livnat. During its existence the company has raised $35.8 million from venture capital funds Blackstone Group, Gemini Israel Ventures, Millennium Technology Value Partners and Shasta Ventures.

10. ironSource takes over Supersonic – $150 mio

Israeli start-up company ironSource which is preparing for an IPO takes over Israeli start-up company Supersonic. The transaction amount has not been disclosed, analysts estimate it at $ 50 million. During its existence Supersonic has raised $23.2 million of investment capital.

The flagship product of Supersonic is a platform for monetization of mobile applications.

Let us recall that in July 2014 Supersonic announced raising $15 million in the series B round of funding from one of the largest Chinese venture capital funds SAIF Partners with the help of the already existing investor Greylock Partners.

Top 10 deals in the series E round of funding and higher

1. Taboola – $117 mio

In February 2015, Israeli start-up company Taboola announced raising $117 million in a series E round of funding. The investment company Fidelity Management & Research led the round with the participation of Yahoo! Japan, Advance Publications, Bearing Capital, Comcast Ventures, Marker, Groupe Arnault, Italian entrepreneur Carlo De Benedetti, and others. The total amount of funds raised by the Israeli start-up reached $160 million.

Taboola is developing a platform for content marketing. Among the clients of the Israeli startup are NBC, USA Today, The Weather Channel, The Atlantic, Fox Sports and others.

2. Payoneer – $50 mio

In August 2015, Israeli start-up company Payoneer announced raising $50 million in series E funding round. The round was led by the investment company Wellington Management with the participation of Greylock Partners, Carmel Ventures, Nyca Partners, Ping An and Susquehanna Growth Equity.

Payoneer is developing an international payment system. The company operates in more than 200 countries, supports 150 currencies and provides services for more than 3 million users.

3. Outbrain – $50 mio.

In July 2015, Israeli startup company Outbrain raised $50 million from the investment company Susquehanna Growth Equity. The total amount of the attracted startup funds reached $149 million.

Outbrain is developing a recommended content platform. Among the clients of the Israeli startup are: Visa, McDonald's, Huggies, Seat, and others. Outbrain monthly audience reached 557 million in 2015, the number of recommendations provided monthly exceeded 200 billion.

4. Perfecto Mobile – $35 mio

In November 2015, Israeli Perfecto Mobile startup company raised $20 million in series E funding round. The software and hardware solutions of Perfecto Mobile help businesses test their mobile applications on all common devices and all common situations shortening the testing process from weeks to days or even hours.

Today the company has over 2,000 customers, more than half of which are on the list of Fortune 500. It is composed of large banks and insurance companies, retailers and technology giants.

The latest round was led by the venture capital fund Technology Crossover Ventures (TCV) with the participation of the existing investors: FTV Capital, Carmel Ventures, Globespan Capital Partners and Vertex Ventures. To the present date the company has raised a total of $48.6 million of venture capital investments.

5. Innovid – $27,5 mio

In December 2015, Israeli start-up company Innovid announced raising $27.5 million in the series E round of funding.

The round was led by the investment company NewSpring Capital with the participation of the existing investors: Cisco Investments, Genesis Partners, T-Venture and Sequoia Capital. $12.5 million of the total amount was raised as a loan from the Silicon Valley Bank. The total amount of the funds raised by the Israeli startup reached $65.1 million.

Innovid is a platform for interactive video advertising. The company was founded in 2007 and since then has demonstrated an impressive growth.

6. SimilarWeb – $25 mio

In October 2015, Israeli start-up company SimilarWeb announced raising $25 million in series E funding round headed by the company Naspers, which was in the lead in the previous round held in November 2014 as well.

The SimilarWeb company was founded in 2009 by the CEO Or Offer and the CTO Nir Cohen. The startup is developing solutions for traffic analysis and demonstrates a rapid growth.

The total amount of funds raised by the company exceeds $65 million. Among investors in the Israeli startup are: Naspers, Lord David Alliance, Docor International Management, Yossi Vardi, Moshe Lichtman, Omer Kaplan, Liron Rose.

7. ColorChip – $25 mio

In November 2015, Israeli start-up company ColorChip announced raising $25 million in the series E funding round.

The round was led by the Israel Growth Partners venture fund with the participation of Vintage Investment Partners, as well as previous investors Gemini Israeli Funds and BRM Capital.

ColorChip designs and manufactures optical subsystems and components based on specialized photonic integrated microchips (ASPICs).

The ColorChip company was founded in 2001. Up to the present date, the startup has raised $70.2 million of investment capital. Among the company's investors are: Bessemer Venture Partners, Motorola Solutions Venture Capital, PolyTechnos Venture Partners, Eurofund, and others.

8. Rainbow Medical – $25 mio

In February 2015, Israeli R&D company Rainbow Medical announced raising $25 million and the opening of an office in China. The funding round was led by one of the largest Chinese insurance companies Ping An Insurance Group with the participation of the corporation ZTE, the YongJin investment company and a number of Chinese venture capital funds focused on investments in biomedical technologies.

Rainbow Medical is an R&D company that develops and markets medical devices invented by Yossi Gross - the legendary Israeli entrepreneur in the field of medical technology. As of today, the Rainbow portfolio comprises 13 start-up projects in the field of medical devices.

9. EarlySense – $25 mio

In April 2015, Israeli start-up company EarlySense announced raising $25 million in the series F funding round, led by the Samsung Ventures fund with the participation of Pitango Venture Capital, JK&B Capital, Noaber and Welch Allyn.

EarlySense constantly monitors the elderly patients and helps reduce the number of "false alarms". For many years a bunch of wires leading to the monitors has been saving the patient at the sign of too strong a change in the heart rate or breathing. At the same time, sensitive devices often trigger an alarm when the patient simply flips, coughs or scratches. This happens so often that some nurses are already beginning to ignore the signals, which exposes the patient to a real danger. Instead of attaching numerous wires to the patient's body, EarlySense engineers have proposed to put under the mattress a flat iPad-sized sensor device. It is sensitive enough to detect the patient's breathing, heart rate, and movements in the bed. Implementing EarlySense in US hospitals shows that the risk of false alarms is reduced by several times.

10. ironSource – $20 mio

In February 2015, Israeli start-up company ironSource announced attracting additional $20 mio from Access Industries owned by Leonard Blavatnik. There were additional investments in the company following the $85 million round of investments, headed by the same Access Industries a few months earlier.

ironSource is a platform for Mobile applications distribution showing rapid growth and planning an IPO. The funds raised will be used for acquisition of start-up companies in order to increase the capitalization of the Israeli start-up before going public.

Тop 10 deals in the series D funding round

1. SimpliVity – $175 mio

In March 2015, US-Israeli start-up company SimpliVity announced raising $175 million in the series D funding round. The company was evaluated at $1 billion. The round was led by the investment company Waypoint Capital with the participation of Accel, CRV, DFJ Growth, Kleiner Perkins Caufield & Byers and Meritech Capital Partners.

SimpliVity develops a hyper converged data virtualization platform. The company's flagship product is an OmniCube platform for virtualized VMware environments.

Diligent Technologies, the previous startup of the founder of SimpliVity Doron Kempel, was absorbed in 2008 by IBM for $200 million. It should also be noted that Kempel was member of an elite IDF special unit wich was preparing an attempt attack on Saddam Hussein.

2. Fiverr – $60 mio

In November 2015, Israeli start-up company Fiberr announced raising $60 million in the series D funding round. The round was led by the Square Peg Capital venture fund with the participation of Accel, Bessemer Venture Partners and Qumra Capital. The total amount of funds raised reached $111 million.

Fiverr is an online business platform where sellers - millions of people around the world - monetize their skills, providing themselves with an independent source of income, and buyers - ordinary network users - have access to a competitive market of workers ready to perform a variety of tasks for 5 dollars.

3. SiSense – $50 mio.

In December 2015, Israeli start-up company SiSense announced raising $50 million in the series D funding round. The round was led by the Bessemer Venture Partners venture fund with the participation of the existing investors: DFJ Growth, Battery Ventures, Genesis Partners and Opus Capital.

SiSense offers a complete solution for business analytics that allows users without technical training to turn massive amounts of data into applicable information in a matter of hours, not days. Among the company's clients are: Samsung, Sony, eBay, Philips, Target, Lockheed Martin and others.

 The SiSense company was founded in 2005 by Amit Bendov. As of today, the Israeli start-up raised $94 million of investment capital.

4. BrainsGate – $26 mio

In January 2015, Israeli start-up company BrainsGate announced raising $26 million in the series D funding round. The total amount of funds raised rises up to $70 million. Among the investors of the company are: Elron Electronic Industries, Agate Medical Investments, Alice Ventures, Boston Scientific, Infinity Equity, Johnson & Johnson Development Corporation, MB Venture Capital Fund, Pitango Venture Capital, Shrem, Fudim, Kelner Technologies and others.

BrainsGate is developing a revolutionary method of quick and efficient recovery of people after a stroke. If the miniature device in the size of a grain of rice is implanted in the patient's palate within the next day after the stroke it can prevent brain damage.

5. Qwilt – $25 mio

In June 2015, Israeli start-up company Qwilt announced raising $25 million in the series D funding round.

The round was headed by US-Israeli venture fund Disrupt-ive (having invested $16 million), with the participation of the following funds: Accel Partners, Redpoint Ventures, Innovation Endeavors, Bessemer Venture Partners, and Cisco Investments. The total amount of the funds raised reached $65 million.

The flagship product of Qwilt is a carrier-class platform for optimization of OTT video traffic. Qwilt was founded in 2010 by Alon Maor and Dan Sahar.

6. WalkMe – $25 mio

In June 2015, Israeli start-up company WalkMe announced raising $25 million in the series D funding round. The round was led by the Greenspring Associates venture fund with the participation of Scale Venture Partners, Gemini Israel Ventures, Giza Venture Capital and Flint Capital.

The WalkMe flagship product is an enterprise platform of online support to clients who are experiencing difficulties with using a new product. The WalkMe company was founded in 2012 by the CEO Dan Adika and the COO Eyal Cohen.

7. Siklu – $18 mio

In August 2015, Israeli start-up company Siklu announced raising $18 million in the series D funding round. The round was attended by Amiti Ventures, Argonaut Private Equity, DFJ Tamir Fishman Ventures, Evergreen Venture Partners, Qualcomm Ventures, SerComm and Tamares Group.

Siklu is one of the world's leaders in designing and manufacturing RRL millimeter range equipment. Through reorganizing millimeter systems components Siklu provides a wireless gigabit channel at the lowest price in the industry. Siklu solutions are easily scalable and allow service providers to evolve their networks from 2G/3G to HSPA and 4G, as well as to incorporate opportunities for future topologies implementation.

8. Taykey – $15 mio

In January 2015, Israeli start-up company Taykey announced raising $15 million in the series D funding round. The round was headed by the Innovation Endeavors venture fund with the participation of Sequoia Capital, SoftBank Capital, Tenaya Capital and Marker. The total amount of the funds raised reached $32 million.

Taykey is developing a marketing platform based on the data on the CA interests obtained in real time from social networks. Among the Israeli start-up customers are: AT&T, Chevron, Coca Cola, GAP, Paramount, P&G, Phizer, Samsung, etc. Since the launch of the platform in 2013, the start-up has demonstrated 600% growth.

9. 90min – $15 mio

In October 2015, Israeli start-up 90min announced raising $15 million in the series D funding round. The round was led by ProSiebenSat.1 Media SE with the participation of the following venture capital funds: Battery Ventures, Dawn Capital and Gemini Israel Ventures. The total amount of the funds raised reached $38.8 million.

90min is developing a social network for sports fans. Among the partners of the Israeli start-up are Huffington Post, Independent, Telegraph, Mirror, GQ, Chicago Tribune, USA Today and others.

10. TriPlay – $11 mio

In April 2015, Israeli start-up company TriPlay announced raising $11 million in the series D funding round. The round was headed by the investment company Fortress Investment Group with the participation of the existing investors, such as the in-law of former Prime Minister of Kazakhstan Kenes Rakishev and the founder of TriPlay Tamir Koch.

TriPlay is developing an ecosystem for creating a personal cloud. The company was founded in 2004. TriPlay Headquarters are in the United States and in Israel.

Top 10 deals in the series C funding round

1. Vroom – $95 mio

In December 2015, US-Israeli start-up company Vroom announced raising $95 million in the series C funding round. The following venture funds participated: Adams Street Partners, Allen & Company, Alpha Venture Partners, Catterton Partners, General Catalyst Partners, October Capital , River Cities Capital Funds and T. Rowe Price.

Vroom is developing a platform for selling used cars. It should be pointed out that in July 2015 the company raised $54 million in the series B funding round, and $19 million in the series A round a month earlier. The total amount of the funds raised reached $168 million.

2. Checkmarx – $84 mio

In June 2015, Israeli start-up company Checkmarx announced raising $84 million in the series A funding round. The round was led by Insight Venture Partners.

The flagship product of Checkmarx is a platform of the software source code analysis able to detect security problems at early stages. Among the clients of the Israeli start-up are the US Army, Coca Cola, numerous financial institutions and large corporations.

3. Cybereason – $59 mio

In October 2015, Israeli start-up company Cybereason announced raising $59 million in the series C funding round.

The round was led by SoftBank. The previous round was held in May 2015 and led by the Spark Capital venture fund with the participation of a strategic investor — US defense group Lockheed Martin which invested $10 million.

Cybereason is developing a comprehensive solution for IT-security able to identify and block threats such as Flame, Doqu and Stuxnet. The company's revenue in 2014 reached $100 million instead of the projected $10 million.

4. Moovit

In November 2015, the venture capital fund Sound Ventures founded by actor Ashton Kutcher and Guy Lake (Madonna's and U2 manager) invested in Israeli start-up company Moovit. The transaction amount has not been disclosed. The funds raised will be used for the Moovit’s development in the Indian and Chinese markets.

The Moovit was founded in 2012 by Nir Erez. As of today, the start-up has attracted over $81 million of investments. Among the company's investors are Sequoia Capital, BMW i Ventures, Nokia Growth Partners, BRM Capital, Gemini Israel Ventures, Vaizra Investments and others.

It is worth mentioning that in May 2014 Ashton Kutcher invested in Israeli start-up Timeful (which was taken over by Google just a month later) and in the Israeli start-up Invi in June 2013.

5. Fundbox – $50 mio

In September 2015, Israeli start-up company Fundbox announced raising $50 million in the series C round of funding led by the Spark Capital Growth venture fund with the participation of Bezos Expeditions, Blumberg Capital, Entree Capital, General Catalyst Partners, Khosla Ventures, Sound Ventures and Shlomo Kramer.

Fundbox supplies products for financial management focused on small business. According to the company representatives, Fundbox solutions help small businesses grow, acquire independence and realize their potential through effective invoices management. Over the past 18 months, the quarterly growth dynamics of Fundbox exceeded 300%. The funds raised will be used to accelerate global expansion and further development of the service.

6. Compass – $50 mio

In September 2015 US-Israeli start-up Compass announced raising $50 million in the series C round of funding. The round was led by the investment company Institutional Venture Partners (IVP) with the participation of .406 Ventures, Advance Publications, Founders Fund, Thrive Capital, the CEO of American Express Kenneth Chenault and the CEO of Salesforce Marc Benioff.

Compass is developing a platform for real estate searching which is radically different from competitors on the market. The funds raised will be used to expand the start-up beyond New York.

7. ElMindA – $28 mio

In November 2015, Israeli start-up ElMindA announced raising $28 million in the series C funding round. The round was attended by Shanda Group, The Kraft Group, Wexford Capital, WR Hambrecht & Co, Palisade Capital Management, OurCrowd, Healthcrest AG and others investors.

Innovative non-invasive devices made by professionals ElMindA have already demonstrated remarkable efficiency in clinical tests. The new devices are based on the BNA technology and are designed for personalized diagnosis and monitoring of the brain diseases course under the control of a psychiatrist or a neurologist. BNA can be of great help in diagnosis and treatment of not only ADHD but also common medical conditions such as Parkinson's disease, migraine, depression, drug addiction, chronic pain syndrome.

8. Tapingo – $22 mio

In April 2015, Israeli start-up Tapingo announced raising $22 million in the series C funding round. The round was led by the Qualcomm Ventures venture fund with the participation of Carmel Ventures, DCM Ventures, Khosla Ventures and Kinzon Capital.

Tapingo is developing a comprehensive solution for food delivery from restaurants focused on college campuses. After having a look at the selected restaurant menu the users make the payment via thier phones. Upon the customer's arrival at the restaurant, the dish is already waiting on the table.

9. Interlude – $18,2 mio

In December 2015, Israeli start-up Interlude announced raising $18.2 million in the series C funding round. The round was attended by Metro-Goldwyn-Mayer, Warner Music, Samsung, Sequoia Capital and Intel Capital. The head of Metro-Goldwyn-Mayer Gary Barber has joined the Interlude Board of Directors. The funds raised will be spent on product development.

Interlude is developing a platform for creating interactive videos. Among the partners of the Israeli startup are Universal, Fox, Disney, Sony, Coca Cola, Lincoln, Revlon, L'Oreal, Shell, Ogilvy, etc. According to the company representatives, Interlude interactive videos provide 10 times more efficient involvement of users as compared to traditional video clips.

10. StoreDot – $18 mio

In August 2015, Israeli start-up StoreDot announced raising $18 million in the series C funding round. The round was led by the Singulariteam venture fund with the participation of Samsung Ventures.

The funds raised will be used to develop solutions for fast charging of electric cars batteries. The company's flagship product is a revolutionary battery for mobile devices that can be recharged in a matter of minutes. In addition, StoreDot is developing a new generation of energy efficient displays and proposes using its technological solution in the industry of flash memory and digital cameras matrixes.

Top 10 deals in the series B funding round

1. Infinidat – $150 mio

In April 2015, Israeli start-up Infinidat announced raising $150 million in the series B funding round. The round was led by the TPG Growth investment platform. The total funds raised amounted to $230 million, the Israeli start-up was estimated at $1.2 billion.

Infinidat is developing an enterprise-class data storage systems of the next generation. Due to the use of a proprietary storage architecture, the standard equipment provides highly efficient performance of the system with an unprecedented 99.99999% availability and a 850K IOPS performance.

2. Behalf – $119 mio

In July 2015, Israeli start-up Behalf announced raising $119 million in the series B funding round. The round was led by the MissionOG investment company with the participation of Maverick Ventures Israel, Sequoia Capital, Spark Capital and Victory Park Capital. The former MasterCard International CEO Gene Lockhart has joined the Board of Directors of the start-up.

Behalf is a platform for financing small businesses, which provides loans up to $50,000 to pay bills and other operating expenses.

3. Via – $27 mio

In April 2015, Israeli start-up Via announced raising $27 million in the series B funding round. The round was led by the Pitango Venture Capital fund with participation of Hearst Ventures, 83North, Expansion Venture Capital, RiverPark Ventures, as well as the investment company of Russian billionaire Roman Abramovich Ervington Investments. Pitango Managing Partner Chemi Peres entered the Via Board of Directors. The total amount of the capital raised by Via reached $37 million.

Via is developing a service for joint travels by taxi. The startup currently works exclusively in the borough of Manhattan and provides services for dozens of thousands of visits on a weekly basis. The funds raised will be used to accelerate the company's growth and to expand the coverage area.

4. Argus Cyber Security – $26 mio

In September 2015, Israeli start-up company Argus Cyber Security announced raising $26 million in the series B funding round. The round was attended by Allianz Digital Corporate Ventures, Magma Venture Partners, Magna International, SBI Holdings, Vertex Ventures, as well as the founder of RAD Data Communications Zohar Zisapel and Zebra Medical Vision head Eyal Gura.

Argus Cyber Security is developing a platform for modern cars information systems protection against cyber attacks. The funding will be used to continue research and development, and to accelerate the market penetration of Argus solutions.

5. Vayyar Imaging – $22 mio

In December 2015, Israeli start-up Vayyar Imaging announced raising $22 million in the series B round of funding. The round was led by the Walden Riverwood Ventures fund with participation of Bessemer Venture Partners, Israel Cleantech Ventures, Battery Ventures and Amiti Ventures. The total amount of the start-up funds reached $34 mio.

The flagship development by Nayyar Imaging is a 3D-sensor, which allows to "see" through objects. Vayyar solution can revolutionize cancer diagnostics, robotics and smart homes industry.

6. Playbuzz – $16 mio

In March 2015, Israeli start-up Playbuzz announced raising $16 million in the series B funding round. The round was led by the 83North venture fund along with Saban Capital and the previous investors: Carmel Ventures and FirstTime Ventures.

The flagship Playbuzz product is an open platform for publishers, bloggers, and brands allowing you to create game content such as competitions, quizzes, polls. The funds raised will be spent on expanding the company's international reach and increasing the platform capacity. In addition to headquarters in New York Playbuzz will open offices in Europe and Asia.

7. Loop Commerce – $16 mio

In April 2015, Israeli start-up Loop Commerce announced raising $16 million in the series B funding round. The round was attended by PayPal, Wicklow Capital, SGVC, as well as a number of business angel investors, including top managers of Facebook, eBay, Chegg, Jasper, Magento, and others. The total amount of funding raised reached $29.2 million.

The flagship Loop Commerce product is a billing solution for online trade focused on the gifts segment. Among the clients of the startup are Lancome, Macys, Thomas Dean, Johny Was and others.

8. Signals Group – $15 mio

In October 2015, Israeli start-up Signals Group announced raising $15 million in the series B funding round. The round was led by Sequoia Capital venture fund with the participation of the previous investor TPY Capital. Sequoia Capital Israel partner Shmil Levy has joined the Signals Board of Directors.

Signal provides solutions in the field of converting external Big Data sources into meaningful information for large companies. Among the Israeli start-up clients are Johnson & Johnson, Procter & Gamble, Pepsi, Nestle, Basf, and others.

9. Windward – $10,8 mio

In April 2015, Israeli start-up company Windward announced raising $10.8 million in the series B funding round. The round was led by the Horizons Ventures fund with participation of Israeli fund Aleph, as well as the former CIA Director David Petraeus and the co-author of the book «Startup Nation» Sola Singer.

Windward is developing the technology for monitoring the ships moving data, which could be used in the defense industry, as well as in the civilian shipping. Windward is the first company that has collected data on the movement of hundreds of millions of ships and provided access to this information for customers around the world, including intelligence services and security companies.

10. Tonara – $5 mio

In April 2015, Israeli start-up Tonara announced raising $5 million in the series B funding round. The round was led by the Chinese Internet giant Baidu, with the participation of the previous investors: venture capital funds Carmel Ventures and lool ventures. The Baidu Senior Director of Corporate Development Peter Fang has joined Tonara Board of Directors.

The borrowed funds and the strategic partnership will enable Israeli startup Baidu to enter the Chinese market — the largest in the segment of musical education.

Tonara is developing an interactive musical notes application for musicians. The company was founded in 2008. Today, the startup has raised $9.75 million of investment capital.

Top 10 deals in the series A funding round

1. eVolution Networks – $22,5 mio

In May 2015, Israeli start-up company eVolution Networks announced raising $22.5 million from US billionaire Warren Buffett's investment company Berkshire Hathaway and the GE Ventures fund.

eVolution Networks is developing solutions for increasing energy efficiency of mobile operators. The software package eVolution analyzes operators’ traffic in real time and adapts the distribution of resources according to actual needs of the network. Among the clients of the Israeli startup are Telefonica Group and other major mobile operators. According to the company, eVolution solution can save up to 35% on energy costs.

The funding will be spent on international expansion and new markets entry, in particular, the data centers segment.

2. Cato Networks – $20 mio

In October 2015, Israeli start-up company Cato Networks announced raising $20 million in the series A financing round. The round was led by the funds US Venture Partners (USVP) and Aspect Ventures. The proceeds will be used to implement market entry strategies and the expansion of the Israeli start-up team.

Cato Networks is developing security solutions for mobile and cloud infrastructures. Cato Networks was founded in 2015 by Shlomo Kramer and Gur Shatz.

3. FST Biometrics – $15 mio

In May 2015, the former Israeli Prime Minister Ehud Barak took part in a $15 million round of funding Israeli start-up company FST Biometrics.

FST Biometrics is developing a biometric identification technology for business centers and security agencies. Among investors of the Israeli startup are GMF Capital, LV Holdings, etc. The founder of the startup is Aharon Zeevi Farkash who was head of Israeli military intelligence Aman in the past.

It is worth mentioning that in April 2015 Ehud Barak invested $1 million in Israeli start-up company Reporty Homeland Security.

4. iguaz.io – $15 mio

In November 2015, Israeli start-up company iguaz.io announced raising $15 million in the series A funding round. The round was led by Israeli venture fund Magma Venture Partners with participation of the JVP fund (Jerusalem Venture Partners) and a number of strategic investors.

iguaz.io is still in a «stealth mode», it is only known that the company is developing innovative solutions in the field of data management and storage systems for Big Data, IoT and cloud structures. The iguaz.io Company was established in 2014. The company's founders came from Israeli startups XtremIO (taken over by EMC), XIV (taken over by IBM), Mellanox (went public on the NASDAQ), Voltaire (went public on the NASDAQ, later was taken over by Mellanox) and Radvision (taken over by Avaya).

5. Talkspace – $9,5 mio

In May 2015, Israeli start-up company Talkspace announced raising $9.5 million in the series A funding round. The round was led by the Spark Capital venture fund with the participation of SoftBank and Firstime Venture Capital.

Talkspace is a virtual psychotherapeutic platform focused on people who for some reason cannot make use of classical psychotherapy. The platform allows you to communicate completely anonymously with the therapist both in text mode and in video mode.

6. Keywee – $9,1 mio

In March 2015, Israeli start-up company Keywee announced raising $9.1 million in the series A funding round. The round was led by the Innovation Endeavors venture fund involving Gandyr Group, Israeli fund Marker, the start-up accelerator UpWest Labs and the media holding The New York Times.

Keywee is developing a marketing platform that would allow to automatically determine the most appropriate audience for each content item. Among Keywee customers are CBS, Conde Nast, The New York Times and other media holdings.

7. Showbox – $8 mio

In July 2015, Israeli start-up company Showbox announced raising $8 million in the series A funding round. The round was attended by the AMEX Travel CEO Charles Petruccelli, the head of  IMAX Brad Wechsler, the co-founder of Wix Giora Kaplan, the TPG partner Karl Peterson and others.

The Showbox flagship product is a cloud platform for creating engaging video clips. Showbox was founded in 2013 by Effi Atad and Tomer Afek.

8. Apester – $5 mio

In July 2015, Israeli start-up company Apester announced raising $5 mio in the series A funding round. The round was led by the Mangrove Capital Partners venture fund with the participation of the AOL CMO Tal Simantov, the co-founder of the Wix Gigi Kaplan, the president of Silverstein Properties Tal Kerret and the founder of Amdocs Moris Kahn. The Mangrove Saarland partner of Roy Saar will join the Apester Board of Directors.

The Apester flagship product is a storytelling platform for publishers. Among the clients of the Israeli startup are AOL, Telegraph, The Huffington Post, The Next Web, Weather.com, Food Network and the London Evening Standard.

9. CellMining – $5 mio

In December 2015, Israeli start-up company CellMining announced raising $5 million in the series A round of funding. The round was led by Lazarus Israel Opportunities Fund with the participation of iVentures Asia. The proceeds will be used to continue product development, as well as to enter new markets.

CellMining is developing a platform for self-organizing networks (SON) based on behavioral analytics.

10. KIDOZ – $3,5 mio

In December 2015, Israeli start-up company KIDOZ raised $3.5 million in a new round of funding which was led by the investment company Millhouse Capital owned by Russian billionaire Roman Abramovich, with the participation of the previous investor Chernovetskyi Investment Group.

KIDOZ is a children's content platform comprising tested entertaining and educational applications, which are safe for children. Among the partners of the Israeli startup are Acer, T-Mobile, Polaroid, etc.

Top 10 deals in the seed round of funding

1. Lemonade – $13 mio

In July 2015 US-Israeli start-up company Lemonade announced raising $13 million in the seed round of financing. The round was led by the venture capital funds Aleph and Sequoia Capital.

Lemonade is developing a P2P platform for insurance services. The company Lemonade was founded by the former Powermat president Daniel Schreiber and the Fiverr co-founder Shai Wininger.

2. SafeBreach – $4 mio

In July 2015, Israeli start-up company SafeBreach announced raising $4 million in the seed round of funding. The round was led by Sequoia Capital with the participation of the business angel Shlomo Kramer. Sequoia Capital partner Gili Raanan will join the Board of Directors of SafeBreach. The funds raised will be used for the development of R&D in Israel and in the United States.

SafeBreach is developing preventive solutions for information security. SafeBreach was founded in 2014 by the CEO Guy Bejerano and the CTO Itzik Kotler.

3. Nuro Secure Messaging – $2 mio

In October 2015, Israeli start-up company Nuro Secure Messaging announced raising $2 mio in the seed round of funding. The round was headed by the investment company Evolution Equity Partners with participation of Karen Evolutions Partners.

Nuro Secure Messaging is developing a secure instant messenger for the corporate segment. The company was founded in 2014 in Tel Aviv.

4. Parola – $2 mio

In October 2015, Israeli start-up company Parola announced raising $2 million in the seed round of funding. The round was attended by the Capital International partner Michael Cohen, the former head of Aladdin Yanki Margalit and Vice President of The Orchard Miki Tunis.

Parola is developing a platform for joint creating and working on musical compositions.

5. Switch – $2 mio

In May 2015, Israeli start-up company Switch announced raising $2 mio in the seed round of funding. The round was headed by the Marker venture fund with the participation of Metamorphic, Rhodium, BAM, SGVC and business angel Marcel Legrand.

Switch is positioning its service as "Tinder for employment". The company was founded in 2014 by Yarden Tadmor.

6. Dronomy – $1,5 mio

In September 2015, Israeli start-up company Dronomy announced raising $1.5 mio in the seed round of funding. The round was led by the venture fund Battery Ventures with the participation of lool ventures, Oryzn Capital, Index the Ventures partner Saul Klein, the Ambient Sound Investments partner Toivo Annus and the Skype ex-CEO Josh Silverman.

Dronomy is developing a software solution for UAV that allows them to fly in fully autonomous mode avoiding collision with obstacles. Dronomy was founded in 2014 by Ori Aphek.

7. Mapme – $1 mio

In June 2015, Israeli start-up company Mapme announced raising $1 mio in the seed round of funding. The round was attended by the venture capital funds DRW Venture Capital, Kima Ventures, Wellborn Ventures, as well as a number of business angels.

Mapme is developing a platform for creating maps that a user can adjust. An organization can create a map in accordance with the subject or interests and share it with their clients who will be able to add new locations to it later.

8. BidFlyer – $1 mio

In September 2015, Israeli start-up company ByFlyer announced raising $1 million in the seed round of funding. The round was headed by the Singulariteam venture fund.

BidFlyer is developing an RTB platform for airlines. In May 2015 the company was included into the Cockpit start-up support program of Israeli airline El Al. BidFlyer was founded in 2014 by the CEO Asaf Gendler and the CTO Guy Kaplan.

9. Spikko – $1 mio

In December 2015, Israeli start-up company Spikko announced raising $1 mio from private investors. The funds raised will be used to strengthen Spikko marketing activities in the SOHO segment.

The Spikko flagship product is an application that allows to use several mobile numbers in one phone while being in any country in the world. Subscribers from the countries will be able to use a local number to contact the user at local rates.

10. Optishell – $0,5 mio

In May 2015, Israeli start-up company Optishell raised $0.5 mio in the seed round of funding from the venture capital fund Vaizra Capital owned by Lev Leviev and Vyacheslav Mirilashvili.

The flagship Optishell product is a system for tracking illegal recording in movie theaters. The company has developed an optical instrument that responds to a reflection camcorder lens and tracks the location of the filming person in the cinema.

Top 10 new incubators and accelerators

1. Samsung founds a start-up accelerator in Israel

Samsung announced launching an Israeli start-up accelerator Runway based on its own R&D center in Yakum Park. The accelerator will be managed by Yossi Smoler, head of the group of open innovations in the Samsung Israeli R&D center and former head of start-up incubators in the Office of the Chief Scientist in Israel's Ministry of Economy.

6 to 10 start-ups are expected to join the first Samsung Runway cycle. The program is scheduled to start late in 2015 and it will last for 6 months. It is emphasizing that Runway is the first accelerator in the world launched by Samsung and focused on working with start-ups at the earliest stages. As a part of the accelerated program, start-ups will receive a grant of $50,000, office space, access to laboratories, mentors and Samsung business consultants, as well as the opportunity to cooperate closely with all Samsung head structures in South Korea.

2. Visa Europe launches an innovation hub in Tel Aviv

Visa Inc. announced the launch of its own innovation hub in Tel Aviv as part of the project Visa Europe Collab. The new hub is expected to provide 20 Israeli start-ups with 100-day support program focused on fin tech companies. Visa launched a similar project in London in 2014.

Oded Salomy, previously Visa Europe Subregional Manager for Israel and Malta, will now lead Visa Europe Collab in Tel Aviv. Four Israeli startups have already joined the program Visa Europe Collab - Zooz, Prontoly, PayItSimple and MyCheck. Israeli venture fund Terra Venture Partners has become a local partner of Visa in the new project.

3. Yahoo! establishes the first startup accelerator in Israel

In July 2015 Yahoo! announced the creation of its first accelerator — SigmaLabs — which will be located in Ramat Gan.

British-Israeli venture firm Entree Capital along with Microsoft became partners of the new project. The first program designed for 5 startups launched in September 2015. SigmaLabs will focus on projects in the fields of Big Data, AdTech and FinTech. The new accelerator will be managed by Entree Capital analyst Eran Bielski.

4. 500Startups opens an office in Israel

In September 2015 US venture fund and startup accelerator 500Startups announced opening of the Israeli office headed by Adam Benayoun and Diana Moldavsky.

The branch will be responsible for development of the 500 Startups network in Israel, as well as the search for new start-up companies in the local market. In 2016, 500 Startups is planning to invest up to $5 million in 10-20 Israeli startups at the seed stage.

5. MassChallenge opens an accelerator in Jerusalem

MassChallenge international start-up acceleration program announced the opening of new offices in Jerusalem.

MassChallenge Jerusalem branch will open early in 2016 with the support of the Jerusalem municipality, the state company for the development of Jerusalem — Jerusalem Development Authority, the charitable structure Combined Jewish Philanthropies, EMC, Hapoalim Bank, Kraft group and the law firm Herzog, Fox & Neeman.

6. Techstars METRO Accelerator comes to Jerusalem

In June 2015 the Techstars project METRO Accelerator was introduced to the Israeli start-up market. As part of the METRO accelerator, Techstars and R/GA are looking for startups that are ready to support the development of innovations in gastronomy, hotel and catering industry with their technical ideas.

During the second phase of the program, which will last for three months and will be held in Berlin, mentors will support 10 selected start-ups in order to help them develop their ideas. The main advantage of the accelerator is access to customers as well as to 5,500 METRO sales representatives.

7. Australia will establish a start-up incubator in Tel Aviv

In December 2015, Australian Prime Minister Malcolm Turnbull announced a new program of development of the high-tech industry, which should help the country develop its fast-moving economy of the XXI century.

Within the program aimed at encouraging investment in high technology, changes in the labor market regulation, investment in R&D and education, promotion of innovative entrepreneurship, Australia will create national start-up incubators in Tel Aviv and Silicon Valley. The purpose of the incubators is to provide Australian entrepreneurs with access to the world's high-tech centers.

It is worth mentioning that France is rumored to be planning to open the same incubator.

8. Barclays launches a start-up incubator in Tel Aviv

In October 2015 Barclays bank announced plans to create its own start-up accelerator in Tel Aviv.

10 Israeli start-ups from the financial technology and cyber security spheres will be selected for the first acceleration program. The program duration will be 13 weeks, the international accelerator Techstars will be in charge of the educational and consulting part. The enlisting to the new Barclays accelerator will take place in March 2016.

9. Hamadgera is the first accelerator in a kibbutz

In July 2015 kibbutz Revivim announced the creation of its own start-up accelerator, called Hamadgera.

The three-month acceleration program is designed for pre-seed stage Israeli start-ups from the Internet and Mobile industries. In addition to mentoring and consulting support, accelerator participants are provided with free accommodation in the kibbutz.

Revivim with the population of about 1,000 people is located in the Negev desert in southern Israel. Raviv, the world's leader in high-tech products made of thermoplastic materials, the supplier of plastic products and components to global automakers conveyors, was established in the kibbutz.

10. Israel opens the first start-up accelerator for the ultra-Orthodox

Kama-Tech, the first startup accelerator focused on the ultra-Orthodox sector, has officially opened in Tel Aviv. 224 startups applied for participation in the accelerator, 6 out of which will be selected.

Kama-Tech accelerator program provides a 20,000 NIS grant (about $5000) for office space, regular meetings with investors, business trips to New York and London, as well as comprehensive educational and consulting activities.

Cisco became the strategic partner of Kama-Tech. Among other project partners are Intel, Citi Technology Innovation Center, Verisense. The grand opening of the accelerator was attended by the former President of Israel Shimon Peres, investor Yossi Vardi, the CEO of Mobileye Amnon Shashua, the general partner of the Canaan venture capital fund Izhar Shay and others.

Тop 10 political events

1. Israel joined Asian Infrastructure Investment Bank

In April 2015, Israeli Prime Minister Benjamin Netanyahu signed a letter of application for Israel to join the Asian Infrastructure Investment Bank (AIIB).

China proposed to found the international financial institution Asian Infrastructure Investment Bank in 2013. The main objectives of AIIB are: stimulating financial cooperation in the Asia-Pacific region, financing infrastructure projects in Asia, building roads and airports, communications antennas and low-cost housing. AIIB is regarded as a potential competitor to the IMF, the World Bank and the Asian Development Bank.

2. Israel introduces start-up visas

Israel's Ministry of Economy, Ministry of Internal Affairs and the Chief Scientist Office have announced the launch of a new visa program which will open long-term living and working opportunities in Israel for start-up entrepreneurs involved in innovative projects.

The start-up visa will be given for 24 months. The program is currently running in test mode — the first 50 visas will be issued at the invitation of one of 12 companies cooperating with the Chief Scientist Office in the Ministry of Economy in Israel. In the future, the program will expand to all Israeli start-up companies compliant to requirements of the Office.

3. Israel will ratify the Climate Convention

Israeli Ecology Minister Avi Gabai welcomed the Paris Convention against global warming and said that the Israeli leadership would ratify the agreement in its final form.

According to the Minister, the convention opens the opportunity for investment in further development of the alternative energy sources industry and Israel can become the leader in developing new technologies. Within the framework of the Convention, 195 countries expressed their willingness to take action in order to limit global warming by two degrees. The agreement allocates $100 bln a year to emerging countries on financing of environmental projects.

4. China starts negotiating free trade with Israel

China starts negotiating a free trade agreement with Israel, reported the press secretary of the Ministry of Commerce Shen Danyang.

According to Danyang, the two sides have completed the first analysis of practical value of such an agreement and came to the mutual conclusion that the agreement would be beneficial for both countries. The representative of the Ministry of Commerce of China stressed that Israel is an important economic and trade partner of China in the Middle East, located on the revived Beijing Silk Road.

5. Israel approved the program of strengthening economic relations with Japan

The Government approved the proposed Prime Minister Benjamin Netanyahu's program to strengthen economic ties and cooperation with Japan. The program involves cooperation of various ministries and departments, as well as tens of millions of shekels' worth of investments in strengthening economic relations within three years.

Head of the government press service states that deepening trade relations with Japan has a number of advantages for the Israeli economy: the increase in state revenues, geographic expansion of Israeli exports, reduction of external trade risks, the release of new Israeli companies to the Japanese market with a focus on small and medium-sized enterprises. In Japan Israeli knowledge and technology are in demand, this refers to such sectors as: pharmaceuticals and medical equipment, cyber-security, agricultural technology, clean technology, etc. The purpose of the government is to increase exports to Japan up to $1.1 bln a year (50%) by 2020. Another goal is to increase the number of Israeli exporters in Japan up to 210 companies (33%) by 2020.

6. Israel opens an embassy in Abu Dhabi

In the nearest future Israel will open its embassy in Abu Dhabi. This diplomatic mission will only work with the located in the capital of the UAE headquarters of the International Renewable Energy Agency (IRENA). IRENA is an organization founded in 2009 to support the use of all forms of renewable energy.

Israel has become the only country which opened in Abu Dhabi its special mission associated with IRENA so as to be able to provide for the diplomatic mission in the United Arab Emirates. Jerusalem calls this move a "breakthrough" and a huge foreign policy success. Rami Hatan was appointed head of the diplomatic mission. He is expected to go to Abu Dhabi shortly.

7. Israel and China sign an agreement on R&D cooperation

On December 14, 2015 an Israeli-Chinese declaration on cooperation in the field of research and collaborative scientific work was signed in Beijing. Israel was represented by the Minister of Science Ofir Akunis and China — by his colleague Wang Gang.

As a part of the protocol attached to the declaration the parties have agreed to co-finance research projects: $5 million from China and $1 million from Israel. Projects in the area of the human brain study, nanotechnology, 3D-printing, biomedical technology, renewable energy, computer science and "Smart City" systems will receive financing.

8. Israel and Hong Kong conclude an agreement on R&D cooperation

On December 16, 2015, Israel and Hong Kong signed an agreement on cooperation in the field of research and development. On the part of Israel the agreement was signed by representatives of Office of the Chief Scientist in the Ministry of Economy, on the part of Hong Kong — by the representatives of ITC (Innovation and Technology Commission).

The agreement involves co-financing in R&D projects as well as partnerships between Israeli and Hong Kong companies. As a part of the joint initiative, entrepreneurs from Hong Kong will receive funding under the ESS program (Enterprise Support Scheme) from the ITF (Innovation and Technology Fund). Israeli entrepreneurs, in their turn, will be able to attract funding from the Office of the Chief Scientist, that is in charge of the R&D development — the Israeli Industry Center for Research and Development (MATIMOP).

In addition, the Israeli start-up entrepreneurs will be able to enter Hong Kong market through the government institution InvestHK, designed to facilitate the process of international start-ups expansion in Hong Kong. Thus, the StartMeUpHK program was launched within InvestHK, involving allocation of a 'start-up package' worth $500,000 for companies wishing to enter Hong Kong market. The package includes a free start-up tour to Hong Kong, mentor programs from leading Asian businessmen, participation in major regional exhibitions and conferences, as well as direct contacts with partners and potential clients in Hong Kong and China.

9. United States and Israel sign an agreement on joint development of rapid response technologies

The Israeli Ministry of Internal Security and the US Department of Homeland Security have signed an agreement on co-financing development in the field of rapid reaction forces equipment.

 $12 million was allocated to development of new technologies for rescuers, firefighters, police and ambulance teams. Joint US-Israeli projects, developed in the framework of cooperation between the companies and within the companies' cooperation with research institutes, will be eligible to qualify for these funds.

10. Israel and Colorado conclude an agreement on R&D cooperation

Israel and the State of Colorado signed an agreement on cooperation in the field of industrial research and development. The agreement was signed with the goal to stimulate interaction between entrepreneurs, scientists and governmental agencies. Israeli companies that will agree on joint activities with Colorado partners will receive funding from both countries.

On the part of Israel, the funding will be provided by the Chief Scientist Office in the Ministry of Economy, on the part of the State of Colorado — by a new state fund founded specifically to support this initiative.

Top 10 events in the fields of science and education

1. Technion builds a campus in China

In December 2015 the foundation stone of the ''Chinese Technion" was laid — a new campus in Guangdong created through partnership between the Haifa Technion and the University of the Shantou district.

The aim of the new project is to create in Guangdong a higher educational institution of the highest level combining innovative approaches to specialists training with the first and second academic degree focused on science and research. The start of construction ceremony was attended by the ninth president of Israel Shimon Peres, Hong Kong businessman and philanthropist Li Ka-shing (donated $130 million to Technion), the Technion president Peretz Lavie, the GTIIT Chancellor Lee Yangzhou, the GTIIT Vice-Chancellor, honorary professor at the Technion and the Nobel laureate Aaron Ciechanover and Israeli Minister of Science Ofir Akunis.

2. Israel and the UN sign an agreement on cooperation in space

In June 2015 the Israeli Space Agency signed a cooperation agreement with the United Nations Office on Outer Space Affairs. The signing ceremony was held at the UN headquarters in Vienna. On Israel's part the document was signed by the ambassador to the UN agencies in Vienna Zvi Hefetz, and by the UN Deputy Secretary General Yuri Fedotov on the part of the United Nations.

The agreement was signed on the verge of the International Astronautics Congress which will be held in Jerusalem in October this year. The agreement involves participation of Israel in such projects as prevention of asteroids falling on Earth and use of satellite imagery for operating in the areas of natural disasters.

3. Israel helps India increase the level of education

In April 2015 the Government of the Indian state of Maharashtra reported the launch of a multi-stage program aimed at improving the level of education with Israeli support. Vinod Taude, the State Education Minister, announced that the government representatives had held a series of meetings with the delegation of Israeli Ministry of Education. "We wanted to know what students in Israel were taught besides the normal subjects. In particular, there are students undergoing military training and national values are instilled in them," - said Taude.

The first stage of the program will include the broadest possible involvement of children in the education system with an emphasis on rural areas. The second stage will launch the program "Training for Teachers" focused on teaching staff training. A separate program will be created for children with disabilities.

4. The Hebrew University of Jerusalem creates an agro-tech fund

In October 2015 Yissum Technology Transfer owned by the Hebrew University of Jerusalem announced establishing Agrinnovation — an investment fund focused on innovation in agricultural technologies.

The fund first closed at the level of $6 mio which was allocated to the Australian Victor Smorgon Group with the participation of Yissum, the reserve fund of the University staff, as well as a group of Sino-Israeli investors. The new fund will operate under the management of Dr. Ido Schechter.

5. Tel Aviv University creates a new nanotechnology center

In November 2015, the Tel-Aviv University announced an international tender for construction of a new nanotechnology center.

The budget tender is $23 million. The new nanotechnology center will occupy 4000 sq.m. and will consist of 12 laboratories for 120 engineers and scientists. The tender winner will be announced in May 2016.

6. Israel and China create a joint innovation park in Sichuan

In January 2015, an agreement was signed between Israel and China to establish a joint park of innovative technologies in Sichuan Province. The agreement was signed in the framework of Israel-China Innovations Conference.

The new park is located in Hangzhou city in an area of 4,000 square meters. Israeli companies interested in entering the Chinese market, will be provided with offices, laboratories and production facilities. In addition, companies will be assisted in workers recruitment, in obtaining concessional financing, finding business partners, forging markets, etc.

7. Israel opens EdVantage, a platform for educational technologies
 

In November 2015, Israel launched a platform for EdVantage educational initiatives with the help of Aurec Group. In the words of the founders, EdVantage is a hybrid of a start-up incubator and a venture fund.

The new platform will be managed by Amalia Bryl, Shahar Wilner and Yair Brosh. EdVantage has selected two start-up projects for further cooperation. According to Amalia Brill, the platform is not going to take in dozens of projects — at the first stage EdVantage plans to stick to working with a few start-up companies in the field of education.

8. Israel and the United Kingdom are developing an agreement on academic partnership

In December 2015 the Israeli Ministry of Science, Technology and Space announced a partnership program with the Science and Innovation Network platform operating under the auspices of the UK government.

New programs that promote collaborative research and development are designed to double the number of scientists involved in joint projects in both countries. Agricultural technology, water resources, nanotechnology and neuroscience are named among the priorities.

9. Tel Aviv University is in the top 10 best universities for entrepreneurs

In October 2015 Tel Aviv University was ranked 9th by PitchBook among the universities that gave the world the highest number of start-up entrepreneurs. Outside the US, Israel University gained the lead.

Over the last 5 years 250 entrepreneurs operating in the 204 start-up companies graduated from Tel Aviv University, among them Houzz, ironSource, Credorax, Primary Data, Qwilt, etc. Stanford University headed the rating, with University of California Berkeley second, and MIT — third.

10. Israel is the leader in received grants for young scientists under the Horizon 2020 program

In 2015, within the framework of the Starting Grants program, which is part of the European Union program Horizon 2020, 24 young Israeli scientists received special grants. This is the sixth highest number among other countries and the first by a wide margin in regards to the ratio of the country's population to the program participants, informs NEWSru.

In absolute terms, most grants were received by the UK (48) and Germany (47). In total 291 grants were issued. Tel Aviv University became the third university in the number of young researchers having received grants under the program (8 people). The Hebrew University of Jerusalem received five grants, the Weizmann Institute in Rehovot and Haifa "Technion" - four. Scientists from the University of Haifa and Bar-Ilan University and Ben-Gurion received one grant each.

Outlooks for 2016

New players emerging

There is every reason to believe that 2016 will continue the trend of the last decade of multinational corporations increased presence in Israel. In 2015, a number of global companies announced the creation or expansion of their R&D centers in Israel, among them Lenovo, 3M, Bosch, Magic Leap, AVG, Fraunhofer SIT, Origami Logic, AxiomSL, PayPal and others. Such companies as Apple, Facebook, IBM, EMC, Amazon, eBay, PayPal and SanDisk significantly expanded their staff in Israel. It is noteworthy that previously a significant number of R&D centers were created "from scratch" whereas today increasingly more of them are formed on the basis of Israeli startups that have been taken over.

Political prestige growth

Despite the difficult position of Israel in the international arena, the innovation industry becomes almost the main engine of the international political success of the state. Year after year the number of official delegations visiting Israel as a global high-technology forge is growing. In addition to the traditional "start-up pilgrimage" from the United States, in 2015, Israel was visited by exceptionally representative delegations from Germany (leaders of 100 leading companies, including SAP SE, BMW, Bosch, Deutsche Bank, Deutsche Telekom, and others), Britain (headed by the mayor of London Boris Johnson), Australia (40 investors and top managers managing over $150 billion) as well as from other countries.

While business delegations are not uncommon in Israel, the number of political delegations is growing exponentially. The same applies to the strategic partnership between the Israeli government as well as municipal agencies and major players in the high-tech market. For example, Tel Aviv has become the first city to conclude a partnership agreement with Airbnb, and Prime Minister Benjamin Netanyahu monitors personally the Uber progress in the Israeli market. Netanyahu confronted the Minister of Transport Yisrael Katz and accused him of building artificial barriers to prevent companies’ entry on the market that blocks the creation of a healthy competition atmosphere.

Chinese expansion

2016 promises to be extremely fruitful for Israeli-Chinese relations, even against the background of a number of strategically significant events that occurred in 2015.

Let us remind you that in 2015 China started negotiations on a free trade agreement with Israel. Both sides finished the preliminary analysis of the practical value of such an agreement and came to the mutual conclusion that the agreement will be beneficial for both countries. The representative of the Ministry of Commerce of China stressed that Israel is an important economic and trade partner of China in the Middle East, located on the revived Beijing Silk Road.

In February 2015 the migration management of the Ministry of Internal Affairs of Israel decided to ease the bureaucratic procedures for Chinese businessmen who wish to enter the Israeli market. They will be able to obtain an entry visa under an accelerated procedure, if they note that they arrive in Israel for business purposes. According to the new rules, citizens of China will be able to obtain a one-year visa in order to enter Israel without any obstacles and leave an unlimited number of times. In November 2015, an unprecedented delegation of 150 Chinese investors visited Israel to participate in the Sino-Israeli Conference on High Technology held in Haifa. In December of 2015 Israel and China signed an agreement on R&D cooperation, and the founding stone of the "Chinese Technion" was laid — a new campus in Guangdong created through partnership between the Haifa Technion and the Shantou University.

In 2016 the growth of interest in Israeli start-ups is expected from Chinese strategic companies, in particular, Alibaba (which invested in Israeli Visualed and ThetaRay) and Baidu (invested in Tonara and Pixellot). In addition to investments in start-ups, Chinese investors are increasingly more often becoming LP in Israeli venture capital funds, including the funds of top ten, such as Jerusalem Venture Partnes and Carmel Ventures. New players will appear in the Sino-Israeli public-private partnerships, for example, last year it was $100 million Guangzhou-Israel Bio Fund which will focus on the joint Israeli-Chinese projects in the field of life sciences. Among the LP of the new fund are named Guangzhou Municipality and the three Chinese companies, one of which holds a leading position in the Chinese market in the pharmaceutical field. Overall, in 2015 Chinese venture capital funds have invested over $500 million in Israeli start-ups. In 2016 this indicator has the potential to grow significantly.

India

Indo-Israeli relations are based on many years of cooperation in various fields, ranging from the defensive to the academic areas. But if just a few years ago interaction between India and Israel was mainly limited to participation in public tenders, today the situation has changed radically. India increasingly sees Israel as its full strategic partner, and not just a supplier of efficient solutions.  It is proved by a number of joint initiatives in agro-technical, educational and medical spheres.

Interest in Israeli start-up companies has significantly increased. Thus, in 2015 Mukesh Ambani, an Indian businessman and the richest man in India, announced his intention to invest in Israeli start-ups. GenNext Ventures capital fund, part of Ambani's empire Reliance Industries, will be searching for promising companies. GenNext Ventures is focused on projects in the fields of e-commerce and telecommunications. Among other notable events on the Israeli-Indian startup scene is the decision of the Indian conglomerate Tech Mahindra to establish R&D in Israel in partnership with the Israeli company Comverse. In addition, Tech Mahindra, India's fastest growing IT-company with 105,000 employees in 50 countries, intends to invest $20 million in Israeli start-ups.

In 2016, substantial growth is expected in India's interest to the Israeli start-up companies in the field of biomedicine and medical devices, agricultural technologies and telecommunications.

Russia

Russian-Israeli relations in the VC field experienced a real surge in 2013 when the interest of Russian venture capital funds to the Israeli start-up market for the first time could be called truly massive. Since then there has been positive dynamics in the development of the relationship of the two countries — both in absolute terms (the number of transactions) and in less formal relations (the frequency of Russian VC visits to Israel, the participation of Israeli entrepreneurs in Russian events, etc.).

 

If in 2013-2014 the Russian venture capital in Israel was mainly represented by institutional investors, in 2015 a significant part of "Russian" investments was forwarded to the non-core private investors and family offices. It is worth noting that while venture capital funds tend to focus on investments in the seed round or round A, private investors have a slightly broader range of preferences. On the one hand, there is a demand for pre-seed transactions performed as the "first shot". On the other hand, many private investors are considering rounds of series B and above.

Interstate cooperation between Israel and Russia is currently on quite a high level. Israeli Ambassador to Russia Dorit Golender commented on improving economic relations between the two countries: "Today we observe an increased interest to our agricultural products and our achievements in the fields of IT because despite the fact that Israel is small it is the second country in the world for achievements in so many areas: medicine, electronics, and others". In April 2015, experts of the collaborative research group of Israel and the Eurasian Economic Union concluded the feasibility of establishing a free trade area between the EEU and Israel. For Israel the effect of such a free trade zone will result in the growth of trade with the EEU countries by 6-8%, for Russia it will be at the level of tenths of a percent. The experts estimate that the integration will improve the quality of relations between the two countries while activating the investment process and the transfer of technologies which are particularly relevant in terms of sanctions.

In 2015, several Israeli start-ups announced their entrance into the Russian market. They are: a platform for analysis of the SimilarWeb sites, eToro, a social network for traders, and Houzz, a platform for home design. Russian projects also began considering the Israeli market as one of the targets. Thus, in February 2015 the founder of the Russian recruitment agency Pruffi Alena Vladimirskaya announced the establishment of an Israeli branch of the company. The Russian-speaking Israeli law office of Eli Gervits and Daniel Rapoport's media agency Isralife Media Group have become Pruffi’s partners in Israel. The Amdocs company has become the first major Pruffi’s client in Israel.

In 2016 an increase of number of Russian venture capital funds considering Israeli start-ups as an object for investment is expected. Moreover, there will be a significant growth in the number of private investors and family offices for which investments in Israeli innovations will no longer be exotic. Talking about directions, Digital Healthcare and Cyber Security are projected to be the first ones to join the traditionally popular Big Data, SaaS and AdTech.

Ukraine

The Ukrainian-Israeli relations over the last year have undergone quite a number of positive changes. In March 2015, Ukranian Parliament created an interfactional association of deputies ‘Parliamentary friendship group "Ukraine — The State of Israel'' which is headed by MP Oleksandr Feldman. The aim of the association is to consolidate the efforts aimed at enhancing the socio-economic, scientific, technical and cultural cooperation between Ukraine and Israel for the benefit of both countries' nations.

In December, the Israeli Knesset visited the high-level delegation from the Verkhovna Rada of Ukraine together with the Honorary Consul of Israel in Ukraine Oleg Vishnyakov. Ronen Raft, the CEO of the Knesset, told Ukrainian colleagues about various technological innovations used in the Israeli parliament, including the "Green Knesset" — new ways to save water and electricity, the installation of solar cells on the roof of the Knesset, the transition to electronic tablets for recording information, e-mail voting in the parliamentary committees, change of the usual electrical appliances and light bulbs for more fuel-efficient and more environmentally friendly. In the same month, President of Ukraine Petro Poroshenko visited Israel for the first time. During the visit it was decided to establish a free trade zone between the two countries, as well as to develop cooperation programs in the field of agricultural technologies and mechanical engineering.

Speaking about the initiatives of the start-up community, it is hard not to mention the international project Tech Bridge Israel-Ukraine, in which meetings are held between Ukrainian entrepreneurs and leading representatives of the Israeli technology community. The main objective of the project is to create the opportunity to gain experience accumulated by the Israeli companies and funds, to strengthen business ties and expand cooperation between the industries of both countries. The project also holds lectures and seminars for students from business schools and universities. The project was organized by Ukrainian business accelerator GrowthUP, the largest in the world American expats Business Association AmBAR and international conference SVOD (Silicon Valley Open Doors).

In 2015, the project speakers were represented by Ori Lahav, the founder of Outbrain, Guy Klajman, the CEO of eMonetization, Shai Wininger, the co-founder of Fiverr and others.

While in 2015 the only Ukrainian VC who publicly announced an investment in an Israeli start-up was the investment company CIG (Chernovetskyi Investment Group, invested in KIDOZ), in 2016 it will be joined by new venture capital funds, as well as non-core private investors considering the Israeli startups as attractive targets for investment.

Kazakhstan

Formal cooperation in the venture sector between Israel and Kazakhstan began in April 2013, when Kenes Rakishev, the son-in-law of former Prime Minister of Kazakhstan, and Ehud Olmert, former Israeli Prime Minister, presented in Tel Aviv the new $100 million venture capital fund Genesis Angels, later rebranded as Singulariteam. Among the fund's investments are Israeli startups Beyond Verbal, InfinityAR, Webydo, StoreDot, etc. In October 2015 Singulariteam announced the launch of a new $30 million fund that will focus on investments in start-up companies at later stages of growth. The fund plans to make up to three transactions in total in a company with not less than $15 million revenues.

Speaking of intergovernmental contacts, it is worth mentioning a symposium on the development of economic relations between Israel and Kazakhstan which took place in Tel Aviv in March 2015. The symposium was held with the support of a number of institutions, including the Association of Commerce Chambers of Israel, ASHRA, the state-owned company for insuring foreign risks, the embassy of Kazakhstan and a number of Israeli companies operating in Kazakhstan. At the same time, there is still free space for interstate agreements in the spheres of Israel's priority (agricultural technology, water, energy).

Despite the fact that Singulariteam is the only institutional investor in Kazakhstan fully present in the Israeli start-up market, in 2016 a revival is expected among Kazakhstan private investors and family offices, primarily due to the difficult economic situation in the domestic market.

Experience transfer

While initiatives of Israeli technology transfer date back several decades, the transfer of experience has become topic of the day relatively recently. However, the fact remains — having built one of the most efficient innovation ecosystems in the world Israelis are willing to share their knowledge and experience with countries that are ready to learn from them and apply the new skills in practice. For example, in 2014 the New Zealand government asked Israel's help in creating an incubators system for start-ups in the field of high technologies.

In 2015 the Israeli group Yozma announced the creation of a start-up campus in South Korea (supported by the Ministry of Science, ICT and Future Planning of Korea) which will help local start-ups enter the world market in the field of health and biotechnology. Another bright initiative was the launch of the Samurai Incubate program, under which Japanese start-up companies are taking part in a three-month Israeli acceleration program held in Tel Aviv.

In 2016 growth in interest in the Israeli structures able to develop a strategy and implement the elements of the innovation ecosystem is expected. Particular attention is paid to the experts from the customers’ countries who thoroughly understand the economic, social, mental, and other features of their regions. Apparently, the main sources of demand will be concentrated in China, India, Southeast Asia, Latin America and in the former Soviet Union.

Cyber security takes off

Today there are 430 companies in Israel operating in the field of cyber security, according to an IVC study. To compare, in 2006 there were about 250 such companies, and about 20 in 1996. Besides, in Israel there are 40 foreign companies R&D centers focused on cyber security, many of which formed as a result of acquisition of Israeli startups. In 2015 there were 18 exits among Israeli start-ups in this niche, which attracted, in total, $1.2 billion and showed a 40% growth compared to 2014. The percentage data indicates 4% successfully acquired companies, which is a good result compared to the average 2.5%. However, a truly phenomenal indicator is the survival rate of the Israeli start-ups in the field of cyber security — research shows that over the last 20 years every other company has remained afloat.

In 2015, 78 start-ups in the security sector raised $540 million, which is 20% more than in 2014. Israeli startups have attracted the attention of the leaders both as investors and as founders. Thus, former Israeli Prime Minister Ehud Barak took part in a $15 million round of funding of FST Biometrics, a company created by the founder of the Israeli military intelligence AMAN Aharon Zeevi-Farkas. Benny Gantz, former Chief of the General Staff of the Israel Defense Forces, in his turn, has become head of the Israeli startup Fifth Dimension. However, interest in Israeli companies has long gone beyond the local market, for example, ex-CIA director David Petraeus has invested in Israeli start-up Windward. It is obvious that in 2016 interest in the Israeli development in the field of cyber security will only increase, despite quite a high threshold of entry into this segment of the Israeli start-up market.

Island of stability

Israel's position looks very strong against the background of many symptoms of the bursting bubble in the US start-up market. Israeli start-ups, despite the strength of the Startup Nation brand, have quite a balanced evaluating approach and see realistically the growth potential. The positive entrepreneurial culture, the direct access to the leading technology experts and global corporations, the support from the government, the academic potential — all this suggests the stability of the Israeli innovation industry.

 

Author: Roman Gold,

Managing partner of the Israeli investment platform  JSCapital  and editor-in-chief of the Israeli innovations journal  IT Business Week

* The research is based on data from IVC, KPMG, PwC, Deloitte, WEF, IMD, Bloomberg.

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