Mellanox Boss Waldman: Israel’s $6.9 Billion Man

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Eyal Walden, CEO of Israeli electronics chip-maker Mellanox, in Tel Aviv, March 11, 2019
Eyal Walden, CEO of Israeli electronics chip-maker Mellanox, in Tel Aviv, March 11, 2019Credit: AFP

Eyal Waldman, the CEO and co-founder of Mellanox technologies, may be the hero of the moment for Israeli high-tech and an industry veteran, but he is very different from the typical Startup Nation entrepreneur.

The 58-year-old did not get his start in technology at the Israel Defense Force’s famed 8200 intelligence unit or any of the army’s other technology arms. Rather he was an infantry officer in the Golani Brigade and to this day his speech is filled with military concepts.

He is also different from other Israeli tech CEOs in being an extrovert and more flamboyant. His name not only surfaces at technology conferences and investor presentations but in the gossip columns and even in court papers.

At the same time, Waldman has been way out in front of most Israeli high-tech companies in reaching out to Palestinians. The company employs more than 100 Palestinian engineers, including 20 in the Gaza Strip and another 80 in the West Bank town of Rawabi.

At a 2017 conference, Waldman ticked off the advantages of outsourcing work to Palestinian engineers. “Instead of going and trying to educate engineers in India or in China, we can do it 20-30 kilometers from here,” he said. “They are very smart and motivated people, labor is much cheaper there, we work in the same time zone, and we have a very similar cultural base.”

Waldman got his technology education at the Technion-Israel Institute of technology, where he began studying for a degree in chemical engineering before deciding to move to computer science after seeing that this was where the best students gravitated. In received a master degree in electrical engineering before moving to his first job at Intel Israel in 1989.

He stayed there for nearly four years before joining the startup Galileo as vice president for engineering. Waldman quit at the start of 1999 after disagreements with the company’s CEO and founder, Avigdor Willenz.

As it turned out, Waldman missed what could have been the first big exit of his career: Galileo was acquired in October 2000 by Intel for $2.67 billion. Intel was back in his life a second time in the summer of 2017 when it sought to buy Mellanox for $2.3 billion. The offer was rejected.

Waldman formed Mellanox 20 years ago almost to this day with three friends from his Intel days. Roni Ashuri retired in 2015 and Shai Cohen gave up his last post as a director last June. The third founder, Michael Kagan, remains chief technology officer.

Twice during Mellanox’s history Waldman came close to leaving the company, too. The first time was in 2002, in the midst of the dotcom bust, when one of the venture funds invested in the company called for firing half the staff. Waldman refused, saying during a time of crisis, Mellanox should be stepping up investment in research and development. He won over the other shareholders.

The second time was in the first half of 2018 when the activist investors Starboard sought to oust him and the board on the grounds they were mismanaging the company. Again, Waldman was accused of spending too much on R&D.

He was able to resist Staboarrd’s demands, in part because the company’s earnings started improving about the time Starboard mounted its shareholder battles. The sides reached a compromise last June and today there are big returns for everyone.

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