Recent Investments in Israel

by Yoram Ettinger

The 77th issue of Straight From The Jerusalem Boardroom highlights the resurgence in the investment, in Israel, by American pension funds.

1. Illinois Teachers Pension Fund ($25MN), California Institute of Technology (Cal Tech) Pension Fund, Ontario State Employees Pension Fund, Bank of America, Harbor West and Japan’s NIF and Nippon have participated in the closing of $140MN by Israel’s Evergreen VC Fund. Evergreen’s success is due to the track record of the Israeli VC funds and in defiance of security concerns. Astute investors have noticed that the presence of the Dot.Com companies in Israel has been much slimmer than in the US, and that most Israeli technologies are solid engineering (production/export oriented) in nature (Globes, Sept. 15, 2003, The Marker, Sept. 14).

2. Nokia Ventures, which is the largest VC fund in the areas of wireless communications and Internet, has just established its Israel Office. According to Nokia’s Helsinki headquarters, "Israel has become one of the key investment targets for Nokia Ventures. One can’t ignore the Israeli market, if one wishes to be a global VC fund. The Israeli potential is larger than the entire European potential for Nokia." Nokia’s first investment in Israel took place earlier in 2003 ($4.2MN in EZ-Chip). (The Marker, Sept. 14).

3. Alabama’s ($7BN) SCI has acquired Israel’s Elcint plant in Ma’alot, expanding its Israeli operation to four plants. Chicago’s LBNF has acquired Israel’s Mavix for $1.2MN (The Marker, Sept. 8, 2003).

4. Ken Levy, the Chairman of the $11BN KLA-Tencor, a global leader in the production of equipment and supplies for the semi-conductors industries: "KLA-Tencor intends to increase its 180 manpower in Israel by 50% during the next two years… KLA’s Israel plant (established 16 years ago and scoring a $60MN profit in 2002) oversees the development and global marketing of KLA’s overlay products… Notwithstanding security problems, Israel possesses unique technologies unavailable in any other country in the world. In spite of the unpleasant TV reporting from Israel, it is much easier to do business in Israel in 2003 than it was 16 years ago…" (Ha’aretz, Sept. 7, 2003).

5. Bloomberg Capital, Garage Technology Ventures and Japan’s Hitachi participated in the $3MN round of private placement by Israel’s iCognito (Globes, Sept.11, 2003).

6. IIRF’s Jungo concluded a $5.5MN 3rd round of private placement , led by Partech International, joined by Siemen’s Infinion VC fund, Intel Capital and Silicon Valley’s Telesoft Partners. Jungo is adding 10 more employees to its current 90. Jungo has concluded long-term contracts with Texas Instruments, Intel, Toshiba, Altera, US Robotics, Samsung, which yielded $7MN revenues in 2002 (The Marker, Sept. 8, 2003).

IIRF’s TopSpin (26 employees) has launched clinical trials in two major medical centers in Germany. Topspin raised $16.5MN in its 2nd round in December 2002.