Tuesday, November 1, 2016

Surging foreign investment defies global trend - Yoram Ettinger

by Yoram Ettinger

According to Forbes magazine's September issue, "Since 2011, there has been a 50% year-on-year growth of Chinese investment in Israel

According to KPMG, one of the four largest global auditing firms, Israel has become a leading hothouse for financial technology companies. Nine out of 100 globally promising fin-tech companies are from Israel, up from eight out of 100 in 2015. 

One of the Israeli companies, digital payments company Payoneer, raised $18 million on Oct. 6 in a round led by the Silicon Valley-based Technology Crossover Ventures and the Bala Cynwyd, Pennsylvania-based Susquehanna Growth Equity. 

In defiance of the global financial downtrend, but as a derivative of Israel's cutting-edge technologies, Israeli high-tech companies raised $1.19 billion in the third fiscal quarter of 2016, the second highest quarterly amount in 10 years. During the first nine months of 2016, Israeli high-tech companies raised $4 billion -- 27% above the $3.15 billion raised during the first nine months of 2015. However, the third quarter of 2016 has recorded a 24% decline compared with the third quarter of 2015, although the total for September was higher than August.

Boston Scientific acquired Israel's EndoChoice for $210 million; Israel's Ormat Technologies concluded a senior-unsecured-bonds tender for $204 million; and the New York-based CA Technologies acquired Israel's BlazeMeter for $100 million, marking the company's 13th Israeli acquisition. The $3 billion-worth U.S. cyber giant ProofPoint acquired Israel's FireLayers for $55 million, making the latter its research and development center. Global trade platform eBay acquired Israel's Corrigon for $30 million, marking its sixth Israeli acquisition. Multinational biopharmaceutical giant Shire extends its strategic partnership with Israel's plasma-derived protein therapeutics company Kamada, which is expected to yield a minimum of $237 million in revenues by 2020.

According to Forbes magazine's September issue, "Since 2011, there has been a 50% year-on-year growth of Chinese investment in Israel. ... The business relations between Israel and China is growing. For example, Li-Ka-Shing, the Hong Kong-based tycoon, has invested -- privately and via his venture capital fund, Horizon Ventures -- in 30 Israeli companies."

China's $3 billion-worth Neusoft IT co-founded a $250 million investment fund with Israel's Infinity Capital Equity Fund, targeting Israeli digital pharmaceutical equipment companies; Chinese internet giant Baidu partnered with Israel's Carmel investment fund, tapping three Israeli companies and opening an office in Israel; China's Innovative Medical invested $30 million in Israel's Pluristem.

Moreover, about $15 billion have been invested in Israel by Chinese giants such as ChemCina, which acquired Adama, a crop protection company, for $3.7 billion; Bright Food, which acquired Tnuva, a dairy producer, for $2.5 billion; and Fosun, which acquired Ahava, a cosmetic producer, for $77 million. Shanghai Giant Network Technology, Alibaba Group founder Jack Ma and additional Chinese investors acquired Playtika, an online company for $4.4 billion. 

Yoram Ettinger

Source: http://www.israelhayom.com/site/newsletter_opinion.php?id=17537

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