From Startup Nation To Scale-Up Nation, Israel Reached New Heights In 2014
A roundup of the biggest hits of 2014, what to expect in 2015 and a talk with stars of the Startup Nation – Gigi Levy, Yifat Oron, Rami Beracha and Jon Medved.
As we enter 2015, it’s safe to say that 2014 may have been the best year yet for Israeli tech. From the largest number of Israeli Initial Public Offerings (IPOs) since the dot com boom, to the faith placed in Israel’s breakthrough cybersecurity and big data sectors by governments and multinational companies, this was a year of unprecedented progress and earnings for the Startup Nation.
In 2014, Israel still boasts the largest concentration of startups per-head in the world, with almost one thousand new firms launched every year.
And, according to Deloitte, international investors place nearly as much faith in their Israeli investments as they do in their American counterparts, a notable achievement for an economy 301 times smaller than the US.
PricewaterhouseCoopers (PwC) Partner Rubi Suliman, like many industry experts, believes that Israeli tech has reached a new peak in 2014: “The stars seemed to be aligned just perfectly this year for the local industry, and brought about such unprecedented success.”
The hard numbers:
According to data collected by PwC, this year saw a total of 70 exits and IPOs worth approx. $15 billion. This is despite the fact that one of the biggest acquisition in Israel’s history, the sale of Waze to Google for $966 million, occurred in the previous year.
- By September 2014, the famed 100 club (Israeli companies worth over $100 million) had already garnered a combined revenue of $3.6 billion, according to data by TheTime. In addition, fifteen companies reached the $100 million mark in 2014, compared to six in 2013.
- Eighteen Israeli companies went public this year (13 in the US and five in the UK), raising a total of $9.8 billion in their offerings, compared to $1.2 billion in 2013. Mobileye, the world leader in car-collision avoidance systems, was the real star on this front, raising $890 million.
- Israeli startups were acquired at a faster pace than ever, within an average of 3.95 years, according to data collected by the Dow Jones VentureSource. This is compared to a period of 5.5 years before acquisition last year and 8.59 years in 2009. In addition, investors in Israeli startups that were acquired saw a 6.2 times return on their investment, compared to just 2.2 over the same time period in Europe.
- The number of jobs in Israeli high tech went up by 3.2 percent in 2014, compared to to 1.5 percent in 2013, according to Ethosia human resources.
- According to data collected by Deloitte, global investor confidence levels waned over Brazil and China, while Canada, Israel and the UK showed increased investor confidence levels. According to the overall confidence levels of venture capital investors, Israel was second only to the US in venture capital confidence.
- 2014 saw the largest-ever foreign investment in Israeli tech, with Intel injecting nearly $6 billion into upgrading its Kiryat Gat chip plant and promising to spend up to $550 million in the Israeli economy in the next five years.
The leading sectors:
- Automotive: Although Israel doesn’t have its own native auto industry, it excels in automobile technology. The most notable achievement this year goes to the inventors of the collision alert system Mobileye, used by major automotive brands like General Motors and Honda, that issued the largest IPO in Israel’s history, raising $890 million at a company valuation of $7.5 billion. Now other leading automotive brands like BMW, Fiat, and Toyota are turning to Israel to develop cutting-edge auto parts and cool technology to deck out their latest models. Another up-and-coming Israeli company, Argus Cyber Security, is taking two industries Israel excels in – automotive and cybersecurity – and combining them into one, providing protection against attacks on the web-connected cars of the future.
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