TechNation: Israel Plans Big Tax Breaks for Multinational Tech Firms

MyThings to layoff scores after losing key customer; Chabot startup Meekan acquired by Doodle; Medi-Tate raises $8 million for prostate technology.

Israeli high-tech workers. Rare is the Ethiopian-Israeli among them.
Alon Ron

Israel plans big tax breaks for multinational tech firms

The Finance Ministry’s budget arrangements law for 2017-18 includes provisions that would give multinational high-tech companies significant tax breaks if they set up research and development operations in Israel, and register the intellectual property they develop here. The proposed legislation would lower the corporate income tax rate for qualifying companies to between 5%-8%, instead of the usual rate of 25%, treasury sources said. The rate on dividends would be just 5%, instead of the 30% now levied. The measures come as Israel prepares to take advantage of a crackdown being led by the Organization for Economic Cooperation and Development on tech companies domiciling their businesses in tax shelters like the Virgin Islands. Officials hope the tax break will lure companies here, drawn by Israel’s role as a major center for multinational R&D, while bringing in more tax revenues on the model of Ireland. (Moti Bassok)

MyThings to layoff scores after losing key customer

MyThings, an online advertising-technology company, is due to layoff scores of employees in the coming weeks after losing a key customer, TheMarker has learned. “The company is adapting its cost structure in light of recent developments with the goal of continuing to meet our international business targets, first and foremost bringing growth to the American market,” the company said. MyThings, which employs about 100 people, 80 of them in Israel, has developed technology that follows users who have visited e-commerce sites without making purchases by continuing to make pitches to them as they surf the web or by means of mobile apps. The company was formed in 2005 by Benny Arbel and Udi Zaidman and was named the fastest-growing Israel high-tech company in 2012 and 2013 by Deloitte’s Fast 50 competition. It accounts Accel Partners and T-Ventures among its backers. (Eliran Rubin)

Chabot startup Meekan acquired by Doodle

In the first exit ever by a chatbox startup, Israel’s Meekan was acquired by Switzerland’s Doodle last week. Neither side undisclosed a sum, but TheMarker has learned it is tied to future performance and could total tens of millions of shekels in the years ahead. Using artificial intelligence, Meekan acts as a virtual scheduling assistant using a conversational interface. In response to a request, the chatbot automatically matches up the schedules of all members of a group chat within seconds and proposes prioritized dates. Meekan’s technology will be integrated into Doodle’s online scheduling platform. “The chatbot as an intelligent virtual assistant allows fast scheduling without having to consult one’s own calendar. It has definitely enormous potential,” said Christoph Brand, head of the digital division at the Swiss media group Tamedia, which owns Doodle. Meekan was formed in 2013 by Lior Yavor, Eyal Yavor and Matty Marianksy with financing from Lin Ka-Shing’s venture fund Horizons Ventures. (Elihay Vidal)

Medi-Tate raises $8 million for prostate technology

Medi-Tate, an Israeli startup that is developing a procedure to treat the symptoms of enlarged prostate, has raised $8 million from an unnamed strategic investor, which also took an option to buy the company at a later date, Medi-Tate’s parent company Xenia Venture Capital said last week. The investor put $4 million into the company now and will add another $4 million within the next six months in a deal valuing Medi-Tate at $50 million after the money. It also took an option to buy out Medi-Tate’s other shareholders within six months of the second tranche at a $100 million valuation, and has a second option within three months after Medi-Tate gets U.S. Food and Drug Administration approval for its iTind procedure at a $150 million valuation. After that it can buy the company at a $200 million valuation in up to three years’ time. iTind uses a temporary implant to reshape the prostatic urethra to create new channels through which urine can flow.  (TheMarker Staff)