In Big Day for Israeli High-tech, Valens Raises $60 Million, Dapulse $25 Million

Third startup, hiSky, looks set to raise $10 million, proving that tech scene is still going strong

Valens' marketing vice president, Micha Risling (left), receiving the Atlas Award for startups from the Ayn Rand Institute in 2016.
Valens' marketing vice president, Micha Risling (left), receiving the Atlas Award for best Israeli startup from the Ayn Rand Institute in 2016. Moti Milrod

It was a big day for Israel’s high-tech industry on Thursday, with two startups announcing they had raised a combined $85 million and a third saying it was on its way to raising $10 million. A fourth company – an Israeli online jewelry seller called R2Net – was reportedly on its way to a giant $300-million exit.

Thursday’s developments offer more evidence that the Israeli high-tech scene is still going strong, powered by interest in self-driving car technology and cybersecurity, even as Silicon Valley is wilting. On Wednesday, the Israeli-European venture capital investor 83North said it had raised $250 million for its fourth fund.

First-quarter figures for high-tech fundraising in Israel haven’t been released yet, but the number of deals in the United States in the first three months of 2017 plunged to the lowest since the fourth quarter of 2011, according to a report released Wednesday by PitchBook-NVCA Venture Monitor. Some 1,797 deals got $16.5 billion in venture financing, a slight increase in the dollar amount after two quarters of sharp declines.

Valens, an Israeli startup that makes semiconductors used to give cars the online bandwidth and wiring required for infotainment and advanced driver-assistance systems, said it had raised $60 million from investors led by Israel Growth Partners.

Other new investors included the British auto components maker Delphi, Samsung Catalyst Fund, Goldman Sachs and MediaTek, who were joined by existing investors.

The new funding will enable the company to speed up the time to market for its HDBaseT technology, develop additional products and support customers, Valens said.

Formed in 2006, the company introduced its automotive technology last year to address the problem of the increasing amount of bandwidth and wiring needed by connected cars. Valens is already working with German automaker Daimler and will now be working with Delphi on in-vehicle connectivity.

Meanwhile, Dapulse – a provider of web-based software to improve team management, communication and productivity for businesses – said it raised $25 million.

Private equity and venture capital firm Insight Venture Partners of New York led the investment round, with participation from existing investors Genesis and Entree Capital. Dapulse, whose 10,000 customers include Adidas, AT&T, Discovery Channel, Samsung, Uber and WeWork, said it would use the funding to boost growth and expand its product offerings. It will be adding scores of employees to its current staff of 50.

The startup was formed in 2012 by CEO Roy Mann and Chief Technology Officer Eran Zinman, both of whom served in the Israel Defense Forces’ 9900 tech unit and worked for the website Wix. They launched their product in 2014 and have raised $34.1 million to date.

HiSky, a two-year-old Israeli startup whose president is former Mossad chief Tamir Pardo, told TheMarker it was in the process of raising $10 million to help it further develop a portable terminal that enables ordinary smartphones to communicate with satellites.

The startup’s Smartellite product is aimed at providing low-cost communication for people out of range of a cellphone network. That might seem like a small market, but in large parts of Africa, India and even the United States, cellphone reception isn’t always available.

HiSky, which counts 10 employees right now, will use the proceeds from its fundraising for marketing and sales, and to lower production costs to make the product more affordable. The product has patent protection in Israel and the company has applications pending in the United States and Europe.

HiSky believes it can cut the cost of a satellite call from $5 a minute to just 10 cents. The terminal itself sells for between $100 and $300, and charges a monthly fee of $35 to $40.