Tech roundup / Layoffs hit Motorola Israel
Hi-tech industry gets a bubble alert while Qualcomm acquires Israeli firm DesertArt.
Layoffs reach Motorola Mobility: The wave of layoffs in the hi-tech industry has touched Israel as well. Motorola Mobility, which was acquired by Google a year ago, announced the closure of its Israeli office and the dismissal of the 30 employees who work there. The closure is part of a worldwide efficiency move, which the firm announced at the beginning of August, that will include laying off 20 percent of its workers and closing one-third of its 94 offices.
Bubble alert? Could the local hi-tech industry be in danger of a bubble even as multinational companies continue to show interest in Israeli technology? Nearly one-third of Israeli hi-tech firms that are candidates for acquisition are Internet companies, according to a survey by IDC, which mapped Israeli firms that are backed by venture-capital funds.
The survey found that most of the companies that reached significant levels of income and are candidates for acquisition are in sectors that are not traditionally associated with Israeli hi-tech: Internet and mobile, infrastructure and applications fields. IT infrastructure is in second place, with computer chips in third.
New plan to boost start-ups: In the value chain that nourishes the local hi-tech industry, startups are born, mature and are sold. Statistics provided by IVC Online show a problem in the first link in this chain: the number of new startups established in 2011 was the lowest in a decade, declining by 40 percent in comparison with 2010.
A new startup accelerator program could change this. The program for startups in Haifa was announced by Sushi Venture Partners, which already has similar programs in Dublin, Amsterdam, Berlin and Copenhagen.
Participating companies will receive an investment of EU 15,000 in return for 8% of the company’s shares. The first group -- 10 startups in the fields of Internet and media -- is expected to begin work in December and continue for three months.
About two weeks ago, Hi-Center announced that a three-month-long accelerator program for companies in the fields of Internet, mobile and new media would also be established in Haifa, the city where the Technion is located, together with development centers belonging to Google, Yahoo, Microsoft and other companies.
While startups compete to enter the accelerator program in Israel, Dafna and Ron Pressler of Tel Aviv have completed the prestigious accelerator program in Silicon Valley, Y Combinator. The Pressler siblings plan to return to Israel, where they will establish their own startup, Parallel Universe. Their company offers video game companies the capability to make Matrix-style games through parallel processing, which will allow the real-time tracking of millions of objects. The Presslers were given only 135 seconds to present their startup to 400 high-ranking investors in the venture-capital world.
They are the second Israeli participants in the sought-after program. Their predecessor was Daniel Gross, an American-Israeli entrepreneur, who completed the program a year ago.
Qualcomm acquiring DesignArt: Qualcomm has signed an agreement to acquire the Israeli firm DesignArt, which develops computer chips for fourth-generation cellular communication stations, for $140 million. The Office of the Chief Scientist, which invested in DesignArt, is expected to receive between $16 and $20 million.
The Goldman-Sachs investment bank served as a mediator in the deal. The company was established in 2006 by Oz Barak and Assaf Touboul. According to statistics provided by IVC Online, the company’s sales in 2011 totaled $6 million, and in 2012 its income is expected to reach $12 million. It has 50 employees.
Adap.tv and uTest made 100 fastest list: The Israeli companies Adap.tv and uTest have made Inc.com’s top 100 list of the fastest-growing companies in the United States. Adap.tv offers a platform and commercial arena for video advertisements, while uTest uses a crowd-sourcing model to test software. Another company on the list is Palo Alto Networks, whose CEO is Nir Zuk.
Li Ka-shing buys Ginger: While Hutchison announced that it was cancelling the deal to acquire control of Partner, the fund’s owner, Li Ka-shing, continues to invest in Israel. The Israeli startup, Ginger, announced this week that it had raised $5.4 million from Horizon Ventures, which is owned by Li Ka-shing.
Steve Ballmer coming to Israel: Finally, Microsoft CEO Steve Ballmer is expected to visit Israel this coming November to participate in events organized by Microsoft Israel and its local development center in Israel, and to meet with senior figures. To date, Microsoft has carried out nine acquisition deals in Israel. The latest of them was the acquisition of the intellectual property of 3DV Systems in 2009 for $35 million. During his previous visit to Israel in 2008, Ballmer inaugurated Microsoft’s development center in Herzliya Pituach.