This was a week marked by wireless love; foreseeably droopy results from competition-stricken mobile operator Partner; an Israeli acquisition in Finland; institutionals pouring money into phone company Bezeq, and evidence that crowd-angeling works: OurCrowd proudly announced that startups have raised $12 million over its tap-the-public platform. Of that, half was in the last three months (see below for more details). Then there was the fledgling startup with a novel way to recruit talent in the crowded field - flout the conventional wisdom: "Wanted: Mobile programmers who really love their children," advertised Yoovi, and promptly found its classified ad with 200 shares on Facebook.
Angels flocking: The aforementioned crowd-funding platform OurCrowd claims that Israeli startups raised $12 million in six months through its site. On average the companies raised $600,000. Jerusalem-based OurCrowd, which operates online by selecting likely companies and posting them online, claims its equity crowd-funding venture (which only takes money from "accredited investors," it says) is raising bigger amounts than rival U.S.-based platforms. "Passing this funding milestone makes OurCrowd this year’s fastest-growing vehicle for angels and accredited investors to find and back early stage companies online," claimed CEO John Medved in a statement.
So what is an accredited investor? Turns out that's a specific thing to each country. In Israel, an accredited investor has to prove he possess equity and assets worth at least NIS 12 million and has experience in investments. In short, OurCrowd isn't for the hoi polloi, it's more like a venture capital fund for angels, who can invest in ventures chosen by the OurCrowd team.
Mwah! Israelis take PowerKiss: In a strategic move, Neve Ilan-based Powermat bought its rival from the fjords, PowerKiss. The companies didn't disclose valuations for the deal, which is closing after months of wooing. Industry sources figure several tens of millions of dollars are changing hands. Helsinki-based PowerKiss had been founded by none other than Nokia: it makes smartphone charging installations for businesses. The bottom line of this union is that the two companies had previously used different technologies and will now use one. Mazal tov.
Now, you ask, what is a smartphone charging installation anyway? Do you still need to plug your phone into the wall using a cable that costs rather less than a car and more than a pineapple? You do not, dear reader. Think of the charging installations like gym mats on the floor, except instead of sweaty would-be slimmers, what sits on the mat is phones. They sit there on the pad getting charged. Several phones can sit on the mat together, which explains why their buyers are businesses. See the picture.
Partner reports 30% drop in mobile revenues: Partner Communications was among the later companies to file its first-quarter financials, and it did not do well. Revenues from cellular calls and phone sales sank 30% year over year to NIS 900 million. Phone sales alone dropped 46% to NIS 176 million because it isn't giving sweetheart terms on phones any more, Partner said, and it's also facing competition from independent phone importers. Its gross margin on selling phones sank 91% to NIS 4 million – or in other words, it doesn't pay for Partner to sell phones. The bottom line is that Partner's profit tumbled 79% against the same quarter last year to NIS 31 million. In other Partner news, it lost 44,000 clients during the quarter but still has a hefty user base of 2.9 million.
Bezeq expands bond issue: In other news of the Israeli telecoms pack, Bezeq is expanding a bond issue to NIS 870 million, driven by institutional demand climbing to NIS 1.2 billion. Altogether the phone company, which now belongs to Shaul Elovitch, owes NIS 9.4 billion to financial institutions and bondholders. Last week the company announced a dividend of NIS 1.36 billion to shareholders, of which NIS 861 million is from first-quarter profits. Possibly some money borrowed from bondholders will thusly find its way to shareholders. For the first quarter of 2013 Bezeq had reported netting NIS 497 million, down from NIS 582 million a year earlier.
With reporting by Amitai Ziv, Inbal Orpaz
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