As usual, VC Cafe is re-posting the “Invest in Israel” Newsletter, published by the investment promotion center of Israel’s Ministry of Industry, Trade and Labor, which offers many helpful tools for prospecting investors. For previous editions of the newsletter, click here.
ISRAEL RAISES GROWTH FORECAST TO 3.5% FOR 2010
Israel’s central bank has raised its economic forecast for 2010, citing an improved outlook for global growth and world trade.
The Bank of Israel now expects the economy to grow 3.5% this year, compared with its previous forecast last September of 2.5%. Earlier, Bank of America-Merrill Lynch and Bank Leumi, one of Israel’s largest banks, also raised Israel’s economic growth forecast for 2010 to 3.5%.
Based on data through November, Israel’s gross domestic product (GDP) in 2009 increased 0.5% from a year earlier, compared to an OECD average of negative 3.5%, the Central Bureau of Statistics said. In the third quarter, the economy expanded at an annualized rate of 3%, while from April to June it grew by 1.1%.
GDP growth per capita in Israel fell 1.3% in 2009 (compared with a 4% drop in OECD countries), while unemployment in Israel stood at 7.7% in 2009 (compared with an average of 8.2% in the OECD).
Israel’s budget deficit was 5.2% in 2009, and is expected to be 5.5% in 2010. Israel’s debt-to-GDP ratio increased by a very low 3%, ending the year at 78% as other countries struggled amid the international economic crisis.
For the most part, Israel weathered the world financial crisis thanks to, among other factors, a relatively conservative banking system that had little exposure to mortgage-backed assets or risky loans.
The Bank of Israel raised Israel’s key lending rate to 1% in late December, after having cut borrowing costs to a record low of 0.5% in early 2009. The Bank of Israel was among the first in the developed world to raise interest rates after the global economic crisis.
BDI COFACE RAISES ISRAEL RISK RATING
International risk rating agency BDI Coface raised Israel’s country risk rating by one grade to A3 from A4. Israel now has the same risk rating as the U.K., Italy and China.
The country rating upgrade, which reduces foreign trade credit insurance premiums and raises potential credit levels, could save Israeli companies up to $100 million, and will also make about 400 more Israeli companies eligible for credit from foreign suppliers .
Israel was one of very few countries in the world that managed to improve its risk rating in recent months, while the global economic crisis continued to weigh on the world’s economies, Coface said .
Coface country ratings A1 through A4 enable countries to get investment and local companies to obtain credit, while ratings of B, C, and D indicate increasing risk, and concerns about default .
COFACE is number one worldwide in export credit insurance and guaranteed ratings uniting high quality partners in the field of credit information and credit insurance. BDI Coface Ltd., a subsidiary of Coface, is the leading business information company in Israel.
WEIZMANN INSTITUTE RANKED #2 WORLDWIDE
Israel’s Weizmann Institute of Science was ranked as the second best international academic institution in which to work outside the United States by “The Scientist” magazine. Weizmann was ranked the top scientific institution outside the US twice over the past 5 years and in 2008 was followed by the Hebrew University of Jerusalem.
Germany’s Max Planck Institute of Molecular Cell Biology and Genetics topped this year’s rankings. Though Weizmann has a quarter of the full-time science researchers that the Max Planck Institute has (106 vs. 400), and publishes nearly a fifth of the volume of papers in life sciences (4,553 vs. 21,819), the Weizmann Institute had a higher average number of citations per paper with 29.76 compared to 28.43 at the Max Planck Institute.
The rankings are based on a survey of 2,350 readers. The annual rankings are based on several weighted categories, including collaborations, teamwork, and obtaining unique funding sources.
SPAIN’S TELEFONICA BUYS ISRAELI VOIP COMPANY JAJAH
Telefonica Europe acquired Israeli VoIP services start-up Jajah Technologies Ltd. for €145 million ($207 million) in cash. Jajah, which was founded in 2005, will continue to operate under its current brand, reporting to Telefonica Europe, which will be the first of the company’s regional business divisions to offer seamless Jajah services to customers. Telefonica Europe operates mobile, fixed line and DSL services using the “O2” label
One of the results of Jajah’s acquisition is that Telefonica, a global telecommunications operation with 260 million subscribers, will now enter the Israeli market. JaJah has an R&D center in Ra’anana with almost 80 employees and Telefonica plans to greatly expand the Israeli development center.
IT MANAGEMENT GIANT CA BUYS REMOTE SERVER SOFTWARE COMPANY OBLICORE
Oblicore is CA’s tenth acquisition in Israel. CA, the world’s leading independent IT management Software Company, is acquiring start-up Oblicore Inc. for about $25 million.
Oblicore, which was founded in 2000, develops Service Level Management (SLM) software to improve access to business applications stored on remote servers at enterprises and telecommunications providers. The flagship product, Oblicore Guarantee™, automates, activates, and accelerates the monitoring, reporting, and management of all service portfolio and service delivery functions for enterprises and service providers .
Oblicore supports and strengthens CA’s ability to set, measure and optimize service levels to meet business expectations across enterprise and cloud (Internet-based) environments .
“Oblicore’s business-centric approach gives enterprises and service providers better understanding and control over the quality and value of their IT service portfolio,” said Ajei Gopal, executive vice president of CA’s Products and Technology Group, adding that through the acquisition of Oblicore “CA is leaping ahead in its ability to help customers optimize IT for better business results and capitalize on the emerging cloud computing opportunity .”
As a long-time CA partner, Oblicore already has field-proven integrations with CA solutions. Oblicore is designed for open connectivity to virtually any data source, with integrations to business systems and application and infrastructure monitoring tools from Microsoft, Oracle, SAP, IBM, HP, BMC and other providers .
Oblicore’s customers include AT&T, ABN AMRO, British Telecom, Cable & Wireless, France Telecom, ING, Lufthansa Systems, Siemens Medical Solutions, and T-Systems .
4 ISRAELI START-UPS WIN RED HERRING 100 GLOBAL AWARDS
Four Israeli start-ups won the 2009 Red Herring Global 100 Awards. The winners are video conferencing solutions developer Qoof Ltd, Panaya Inc, which creates software that reduces the cost and risk of making changes to ERP systems, Internet video and P2P caching solutions developer Oversi Ltd and thin server developer MiniFrame Ltd.
The companies, which were among 16 Israeli companies to win the Red Herring Europe 100 Awards in 2009, were evaluated on both quantitative and qualitative criteria such as financial performance, technology innovation, management quality, strategy, and market penetration.
Past winners of the competition that began in 1996 include Google, Yahoo, Skype, Netscape, Salesforce.com, YouTube, and eBay.
AGASSI’S BETTER PLACE ELECTRIC CAR PROJECT GETS $350 MLN BOOST
Electric car infrastructure venture Better Place raised $350 million in a second fund-raising round held recently. Better Place, the brainchild of Israeli entrepreneur and ex-SAP executive Shai Agassi, raised about $125 million from HSBC in exchange for a 10 percent stake in the project, giving it a market value of $1.25 billion .
The additional $225 million will come from Morgan Stanley Investment Management, Lazard Asset Management, and Better Place’s original investors, which include Israel Corp., VantagePoint Venture Partners, Ofer Hi-Tech Holdings, and Maniv Energy Capital, among others, as shareholders of Better Place.
Better Place is scheduled to have its first grid of service stations for electric cars operational in 2011 in Israel and Denmark .
Renault has publicly endorsed Better Place’s plan, agreeing to supply cars with easy-to-swap batteries and working closely with the company to reach its 2011 commercial debut. Under Better Place’s plan, consumers would buy electric vehicles made by the big automakers. The blueprint calls for thousands of conventional charge points, as well as switching stations where a robotic device could replace a battery.
NASA ADDS ISRAELI TECHNICAL EXPERTISE TO LUNAR SCIENCE RESEARCH
NASA and the Israel Space Agency have signed a joint statement that recognizes the Israel Network for Lunar Science and Exploration (INLSE) as an affiliate partner with the NASA Lunar Science Institute.
The INLSE will bring technical and engineering expertise to advance the broad goals of lunar science at the institute. The initial focus will be on laser communications, robotics, remote sensing and other technologies for future lunar missions.
“NASA looks forward to working with this distinguished Israeli organization to benefit from our shared expertise and advance our understanding of lunar science,” said NASA Administrator Charles Bolden.
“I am very excited the INLSE has become an affiliate member of the NASA Lunar Science Institute,” said Ames Director Pete Worden. “The considerable capabilities of the INLSE in science and related technology development will greatly extend our institute’s reach.”
WALTZ WITH BASHIR MAKES TOP-100 IN 3 UK PAPERS
“Waltz with Bashir“, which won the Golden Globe for best foreign film in 2009, was listed as one of this decade’s 100 best movies by three prominent British newspapers.
The animated memoir of director Ari Folman’s experiences during the first Lebanon War was ranked 11th by The Guardian, while The Times placed the movie 65th, and The Daily Telegraph ranked it 68th.
In 2009 “Waltz” was given the award for best documentary by the Writers Guild of America and was also named the best film of the year by the National Society of Film Critics.
The film uses a stunning combination of frame-by-frame and computer generated animation to create a compelling and at times surreal picture of war and the way memory plays tricks on the mind.