Year in Review

7 Top High-tech Stories of Israel 2013

Five startups including Waze, Mobileye and Wix made giant strides; Better Place and Babylon tanked.

The year 2013 has been good for the Startup Nation. Entrepreneurs have raked in hundreds of millions of dollars in merger and acquisition deals, more companies have conducted initial public offerings than in previous years and venture capital investment reached its highest level in more than a decade in the final quarter.

Deciding which Israeli startups should be in our top five is tough. There are hundreds of startups out there and more than enough cool ideas. But no Israeli company has made it really big on a global scale - there has not been an Israeli phenomenon like Facebook or Twitter, for example, at least since ICQ pioneered Internet chat nearly two decades ago - and most startups tend to melt in the marketplace. Here are five that have come closest, as well as two promising ones that flopped badly during the course of 2013.

Waze created a navigation app that won over tens of millions users and put paid to the old husband-wife debate about whether to check a map or ask directions. In addition to directions, Waze also provides real-time information on traffic conditions, based on crowdsourcing. Google paid more than a $1 billion to buy Waze in June, a giant deal that enhanced Israel’s place on the global high-tech map.

Mobileye makes the perfect complement to Waze: One gives you directions, the other makes sure you get there in one piece. Mobileye warns drivers that they are coming too close to another car or to a pedestrian, or veering out of lane, and will hit the brakes if necessary. The technology uses sophisticated algorithms that can do the job with a simple single-lens camera rather than the usual and more costly multiple cameras or radar. Mobileye, which expects to sell 1.5 million of the devices this year, raised $400 million in new capital in July.

Wix enables people with no knowledge of design or coding to build professional-looking websites using templates and apps. The basic technology is free but, of course, if you want to use more advanced tools there’s a charge. The company counts some 40 million users and went public on Wall Street in November, where its share price has since shot up 75%.

Moovit is doing for the bus rider what Waze did for the motorist: Amassing information from users to provide real-time data on bus and train arrivals, crowdedness and getting around stations. Three months ago, it began selling tickets over its app in certain European cities and in Israel. Moovit has three million users around the world and raised $28 million in December.

Silentium. From one of the world’s noisiest countries comes technology that helps reduce it - not from the guy at the restaurant table next to you, but from electronic equipment. Silentium’s chips and controllers reduce the sound of humming and whirring in everything from corporate computer servers to home air conditioners and even automobiles. Silentium products generate an anti-noise to cancel out as much as 90% of a device’s unwanted noise.

Two companies that would have been top-five candidates but flopped in a big way in 2013 are:

Better Place raised hundreds of millions of dollars and recruited the French automaker Renault as a partner, with plans to roll out a network of battery-changing stations that would keep electric cars on the road long enough to make them practical. Better Place ran through some $800 million of investors’ cash, but no one bought the cars. It filed for bankruptcy last May.

Babylon parlayed its translating software expertise into a fast-growing online advertising business, with a toolbar that people using search engines could download. The catch was that Google Chrome users couldn’t get rid of the toolbar. Citing that and other user complaints, Google cancelled its contract in the fall, depriving Babylon of close to half its revenues and leaving the company adrift.

Zef Nikolla
Tomer Appelbaum