It has been just over a year since communications equipment giant Motorola split into two: Motorola Mobility, which concentrates on mobile computing devices, and for eight months has been in the process of being acquired by Google, for $12.5 billion; and Motorola Solutions, which deals in the company's traditional activity of communications infrastructure, and which continues to operate as a separate company.
Motorola Ventures, Motorola's veteran venture capital arm which was one of the most active corporate VC funds in high tech, was also split. It was decided that the activity in Israel would continue through the VC arm of Motorola Mobility, managed in Israel by Mony Hassid, while Motorola Solutions Venture Capital (MSVC) would focus solely on the US.
However, MSVC is now coming back to Israel. "After we carried out the split in the funds' activity, we continued to receive approaches from interesting Israeli companies nearly every week," says MSVC managing director Reese Schroeder, who visited Israel recently. "We didn't want to start investing again without having someone here, but I felt the need the return to activity in Israel." In February, the fund announced the appointment of Boaz Or-Shraga, who had been manager of Motorola Solutions M2M engineering division, as manager of the local activity.
Strategic impact
With a market cap of $16 billion, and expected revenue of $8.6 billion this year, Motorola Solutions is positioned as one of the largest suppliers of communications infrastructures in the world. The company provides solutions to the federal, state, and local government markets, public security, the enterprise market, with an emphasis on industry, retailing, the health sector, education, and so on. The products that the company supplies include real-time command and control technologies, RF tag monitoring, security, video developments, and more.
The company's broad range of activity means that the venture capital fund is interested in a wide variety of fields. Schroeder says that investments mainly result from the needs of the company's business units. "We invest in companies that, in our view, will have a strategic impact on Motorola's businesses, and we will try to find companies that help to close the gaps we have." Israel is the company's first stop outside of the US.
Accordingly, the fund tends to be involved in the activity of the company after making the investment, with the idea that Motorola Solutions should enter into strategic cooperation with it, and not be content with the position of a behind the scenes investor. This has been the fund's model since it was founded, and it did not change with the split into two companies. What did change, according to Schroeder, was the ability of the funds to focus on what was of interest to each individual company. "Our focus sharpened," he says.
Motorola Ventures made several prominent investments in Israel in the last decade. Two of the portfolio companies that remained in the hands of Motorola Mobility, Amobee and BroadLight, were recently sold to give successful returns, the first to Singapore Telecom, and the second to Broadcom. Motorola Solutions still has stakes in two other Israeli companies, DesignArt, currently negotiating a sale, and Mobileye, which will attempt to reach Wall Street in the next two years.
During his stay in Israel, Schroeder visited several companies and funds, and says that his fund may make an additional investment this year. "We intend to make significant investments in Israeli companies. To what extent? That depends on the opportunities," Or-Shraga explains. The fund has no particular allocation for investment in Israel, and no focus on any particular activity. "We believe that we can find technologies in Israel that suit the company's policy, which is to provide total, end-to-end solutions," says Or-Shraga.
Published by Globes [online], Israel business news - www.globes-online.com - on April 11, 2012
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