Every year, Israeli startups are sold for billions of dollars to global conglomerates, foreign investors and large Israeli companies, all of which are notable achievements for the young Startup Nation. But more than half a billion dollars worth of “exits” in one day? Earlier this week, this whimsical proposition became reality with the acquisition of two Israeli tech companies, Supersonic and Adallom, on the same day.
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The largest acquisition this week was made by American software giant Microsoft, which has reportedly agreed to buy Israeli startup company Adallom for a whopping $320 million. Israeli cyber-security startup Adallom (which means “to this point,” in biblical Hebrew) has developed technology that provides a layer of protection for organizational information transferred over mobile applications. Adallom’s cloud application security platform buffers between the user’s device and their applications in a non-intrusive way.
The company was founded in 2012 by Adam Rappaport, Ami Luttwak and Roy Reznik. It has so far raised $49.5 million in private financing rounds.
If Adallom’ price tag holds true, its acquisition could be Microsoft’s largest-ever in Israel. Microsoft has already acquired several Israeli companies, most recently security startup Aorato, and software companies Equivio and N-trig. Following the acquisition of Adallom, it is possible that Microsoft will eventually open a cyber-security research center in Israel, according to reports in the Israeli media.
Israeli companies to merge
The second Israeli startup sold this week – for an estimated price of between $150-$300 million – is Supersonic, which monetizes mobile apps. The buyer is ironSource, a leading Israeli online software distribution and monetization company, has offices in Beijing, San Francisco and New York.
Supersonic’s flagship product – virtual money for use in online games (primarily via Facebook) – is expected to help ironSource to penetrate the mobile sector, as most Facebook and social media activity occurs on mobile devices.
Since Supersonic was founded in 2008, it has raised $23.2 million in funding, with one of the main investors in the company being a prominent Chinese investment firm SAIF Partners. Supersonic was founded by Nissim Romano, Gil Shoham and Arik Czerniak.
Today (Tuesday), yet another acquisition of an Israeli startup was announced: Israeli mobile analytics company SimilarWeb has acquired personalized content discovery platform developer Swayy, also an Israeli company, for up to $5 million, according to media reports.
54 Israeli startups and $5.3 billion in six months
This impressive cash-flow of $600 million worth in exits, mergers and acquisitions follows six highly successful months for the Israeli high-tech industry. According to the IVC Research Center, the first half of 2015 topped $5.29 billion in exits of 54 startup companies, a phenomenal amount considering the fact that in all of 2014, exits totaled $7 billion.
Moreover, in the first half of 2015, the average exit price for an Israeli startup, $98 million, was 51 percent above the 2014 average, which means Israeli startup companies are given much higher valuations, perhaps providing the strongest proof of Israel’s technological preeminence.
Photos: 401(k) 2012