Exclusive: Intel to Buy Israeli Cloud Service Startup Granulate for $650m

Granulate’s ‘employees are about to become millionaires,’ source says; firm, which was founded in 2018, optimizes cloud services

Ruti Levy
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Granulate was set up in 2018 by Assaf Ezra and Tal Sayag
Granulate was set up in 2018 by Assaf Ezra and Tal SayagCredit: Granulate
Ruti Levy

American tech giant Intel is on the cusp of inking a deal to buy the Israeli startup Granulate for some $650 million, Haaretz has learned.

The deal is not yet final but according to the current agreement, roughly $100 million is intended for severance packages and talent retention of 70 of the Israeli firm’s workers. “The employees are about to become millionaires,” a source with knowledge of the deal said. 

Granulate was set up in 2018 by Assaf Ezra and Tal Sayag. Their product improves the real-time performance of cloud servers. Granulate’s system is installed on the servers that clients rent out from cloud providers. It then studies their performance and optimizes them without any need for programmers or developers. The optimization it provides saves computational power and thus reduces costs substantially. 

Intel will buy Israeli startup Granulate and is also expected to open a new R&D center in southern IsraelCredit: Meged Gozani

Granulate has raised some $45 million since its inception and its latest valuation was at under $150 million (after the money). Investors are expected to make a massive return on their initial investment in the firm.

Meanwhile, Haaretz reported that Intel also plans to open a new R&D center in the south of Israel. Across Israel, Intel employs 14,000 people, including those working at Mobileye, which the company is planning to spin off soon. The head count doesn’t include Tower, an Israeli semiconductor foundry that Intel has agreed to buy.

Of the 14,000, half work in R&D in centers. The biggest is located in Haifa, where the company conducts most of its semiconductor research and is now in the process of building a major new campus designed to accommodate thousands of employees. Others are in Petah Tikva, which focuses on connectivity, communication, cybersecurity, processors and AI, and in Jerusalem, which is engaged in much the same activity.

Intel also has a semiconductor fabrication plant in Kiryat Gat and owns several subsidiaries, like Mobileye (Jerusalem), Movit (Nes Ziona), Habana Labs (Caesarea and Tel Aviv) and Screenovate Technologies (Ra’anana) that it acquired over the years.

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