Going Big in 2013
Shai Tsur of Microsoft posted yesterday that it was a “Good year” for Israeli exits. Shai then lists the M&A deals of 2012 and concludes:
“With some luck, this trend will continue into 2013. The local industry has a large number of startups with well-developed technology that is ripe for the pickings.”
I hope not.
I think Shai has missed the larger story behind the story here. What was important about 2012 in Israel was what did not happen, not what did happen. Here is what did not happen in 2012: Ronen Shilo at Conduit did not sell (although they did distribute almost $400,000,000 in dividends to employees and shareholders). Avishai Abrahami at Wix did not sell. Micha Kaufman at Fiverr did not sell. Eyal, Eran and Rooly at Gigya did not sell. Michael at FiftyOne did not sell. Yossi at Panaya did not sell. Yoav at Kenshoo did not sell. Guy at Solaredge did not sell. Gilad Japhet and MyHeritage BOUGHT their big competitor (actually 8 competitors). All of these entrepreneurs and CEOs kept working to build really large companies.
Do not misunderstand me. I am happy for the founders of Cotendo, Xtremio, Amobee, Crossrider and Oridian. Kudos. However, as an industry and a country we MUST scale up this nation by building big public companies and billion dollar exits. And, we can.
In this regard, Objet, and its very talented CEO David Reis, are THE story this year. Objet was not sold. They found a way to go public, take over a competitor (Stratasys) and try to build a large scale Israeli public company from Airport City near Lod that is run by David. The stock has rallied almost 3X this year because the companies have reached scale in a growing industry. This is not dissimilar from the strategy that Gil Shwed has used at Checkpoint, combining organic growth, new R&D and strategic acquisitions to build a big company headquartered in Ramat Gan. Checkpoint is now a $10Bn company and not a few hundred million dollar acquisition.
Building the next bunch of venture-backed Checkpoints is the challenge for 2013 and beyond. Israel must go public and we must go big. The VCs and the entrepreneurs need to hold on and dream big. Using the internet and now 20 years of experience, we can conquer large global markets from Tel Aviv and overtake China for the #2 country on Nasdaq. I have a lot of faith in Ronen, Avishai, Micha, Eyal, Eran, Rooly, Michael, Yossi, Yoav, Guy and Gilad and all others that are building large companies. Good luck and Godspeed!
[Originally published on 24th December 2012 by MIchael Eisenberg]