Dropbox Acquires CloudOn, to Establish R&D Center in Israel

Herzliya-based company’s technology lets users edit Microsoft Word and Excel documents from mobile devices.

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Dropbox, the San Francisco-based company that provides Internet cloud storage services for documents, videos and photos, announced its first foray into the Israeli high-tech sector on Wednesday with the acquisition of CloudOn, a Herzliya startup.

CloudOn’s technology allows users to edit Microsoft Word and Excel documents from mobile devices. The company recently came out with a new product independent of Microsoft’s software. Dropbox said CloudOn will provide a base upon which it would set up its first office in Israel, which is to engage in research and development and recruit employees beyond CloudOn’s current workforce.

The price tag for the purchase of CloudOn was not announced, but it is thought to be more than $100 million. The Dropbox R&D center here will be headed by CloudOn founder and vice president Meir Morgenstern.

In its statement on its acquisition by Dropbox, CloudOn said it has 9 million users who have created, edited or shared over 90 million documents via the company. “In the short term, we’ll be shutting down the CloudOn service on March 15,” the company said, adding that it is not taking on any new customers.

CloudOn, which has about 50 employees, about half in Israel and the other half in the United States, is a relatively long-standing fixture on the Israeli high-tech scene. Founded in 2010, prior to its acquisition it had raised $26 million. Its investors include the Social+Capital Partnership, which was founded by former Facebook executives, Rembrandt Venture Partners and Foundation Capital.

Its initial product provided users with remote access to Microsoft Office applications from tablet computers and computers that had no Microsoft Office software through the company’s cloud computing service. In November, it launched an application for Apple’s iOS operating system for drafting and editing documents. The new product, which was warmly received by users and Internet bloggers, does not yet support documents in Hebrew.