Tech Roundup / StartApp Reaches 150 Million Users

Multinational high-tech companies plan to expand operations in Israel and a rundown of other high-tech news from this week.

StartApp reaches 150 million users: The Israeli software company StartApp, which installs searchbar apps for smartphones, announced last week that its app downloads had reached 150 million people. StartApp has a business model based on profit-sharing fees earned from software downloads with app developers, similar to the model used by some the largest Internet companies in Israel. Those guys, such as Conduit and Babylon, generate high levels of revenue, and StartApp is consequently considered a promising prospect.

Intel Capital hires two new directors for Israel office: Intel Capital, the investment arm of the global computer chip maker, announced that it will be adding to its staff in Israel by recruiting two new investment directors – Yair Shoham and Merav Weinryb. Shoham previously served as a general partner in the Genesis Partners venture capital fund which focuses on seed investments in the communications industry and medical device market. Weinryb previously served as a principal (a senior associate) at the local venture capital fund Pitango and before that was an associate vice president responsible for corporate development and strategy at Comverse. One-third of Intel Capital's staff works in Western Europe and Israel. Shoham and Weinryb are joining Uri Arazy, Intel Capital's current investment manager in Israel.

34 Ventures invests NIS 7 million in Newzzapp: Locally-based venture funds are also expanding their investment activities in the local market. A new Israeli venture capital fund 34 Ventures has made its first investment, worth NIS 7 million, in Newzzapp, a company developing technology to mediate between news event photographers and communication networks.

34 Ventures is a venture fund established by alumni of the Israel Defense Forces' elite signal intelligence group, Unit 8200 – a unit noted for the significant percentage of its veterans who find their way into the Israeli high-tech industry after completing their military service. Two different companies are behind the establishment of the new venture fund: the Forum Group led by Ami Segal, which is active in the financial services sector, the communications industry and high-tech field; and Platonix Joint Ventures, which provides software development services and has been operating a high-tech start-up incubator for the past four years.

Government taps five companies to set up high-tech incubators: Five companies were chosen by the Industry, Trade and Labor Industry Ministry this week to operate technology start-up incubators in different parts of Israel. Three of the companies picked by the ministry will be opening their first high-tech incubators in Israel, among them the Nielsen, an international market research firm best-known for providing TV ratings, and defense electronics and optics manufacturer Elbit Systems. Nielsen's incubator will be located in Haifa and concentrate on information and communication technologies. Elbit Systems' incubator will operate out of a facility in Be'er Sheva and focus on investments in the field of electronics and information systems.

Additional recipients include the venture capital fund Terra Venture Partners, which specializes in clean-tech investments and will operate a incubator in Yokne’am (a city in Israel's Galilee region), the New Generation Technology fund which will open an incubator in Nazareth and focuses on the medical device and biotechnology fields and Peregrine Ventures which will continue to run the incubator that has operated in the Israeli West Bank city of Ariel for the past decade. The new recipients will open their incubator within the next eight years.

Local start-up Ringbow uses Kickstarter for seed funding: Beyond venture capital and incubators, there are also startups seeking financing from the masses. Ringbow, the Israeli company that developed an interactive ring to provide users with additional touchscreen features, has raised $100,000 from the crowd-funding website Kickstarter. The company plans to manufacture 3,000 such rings and distributed them to financial contributors in November.

Akamai Technologies to expand R&D center in Israel: For many successful start-ups, the day after their profitable market exit and acquisition by a multinational corporation leads to staff reductions or closing local offices. In contrast, Akamai Technologies, the giant Internet network management company which manages roughly 30 percent of Internet traffic, including traffic generated by major well-known websites like Facebook and Google, announced this week that it will be expanding its operations in Israel.

Akamai will expand its research and development center in Israel by forming a new local staff team specializing in developing security solutions. They will operate in addition to the company's already existing staff from Cotendo, which it acquired seven months ago for a purchase price of $300 million. The R&D center is expected to hire 20 new employees in the coming year, according to former Cotendo CEO and current Akamai Vice President Ronni Zehavi.

"Over the years there have been a couple ideas tossed around about expanding our activities into Israel, and it didn't happen for a variety of reasons – and now it's actually happening," said Akamai chief scientist Tom Leighton in an interview with TheMarker earlier this year.

Establishing an R&D center in Israel fulfills the dream of the late Daniel Lewin, who founded Akamai 13 years ago in Cambridge, Massachusetts. Lewin, who was aboard American Airlines Flight 11 on Sept. 11, 2001, was killed in the 9/11 attacks.