"We're not complaining, but they could have gone much farther" says Magma Venture Partners managing partner Yahal Zilka, in response to Facebook Inc.'s acquisition of Onavo Ltd. for $100-120 million on Monday. Behind the scenes, Onavo's founders, who own 30-35% of the company, were the movers behind the sale. "The last thing we'll do is go against the flow," says Zilka.
Magma can smile; Onavo is its second mobile portfolio company to be sold this year. The other portfolio company was Waze Ltd., which Google Inc. (Nasdaq:GOOG) acquired for almost $1 billion in June. "Although Onavo is a different order of magnitude compared with Waze, but in terms of the entrepreneurs' skills, they are no less talented," says Zilka.
Onavo was founded almost by chance, when co-founder Guy Rosen and his brother attended the GSM Congress in Barcelona. They used their smartphones extensively and were hit with huge bills. After paying up, they asked themselves why it was so expensive to go online overseas, since data transmission is the same everywhere. The brothers realized that it was possible to slash incoming data to their smartphones. Guy Rosen teamed with Roi Tiger, a veteran of Dov Moran's modu (which closed in 2011), and who had extensive experience in the mobile industry. They slowly sought a solution for compressing the data being downloaded from servers.
Onavo's challenge in implementing its app in the market was difficult. At the time, there were few apps that worked in the same way. The company had to use an iPhone to make a fairly long installation, which required changing the smartphone profile. This is different from installing standard apps, which operate smoothly and quickly. Onavo was one of the first companies that Apple Inc. (Nasdaq: APPL) allowed to offer an installation system for a user's apps for iPhones.
Rosen and Tiger both served in the IDF's Unit 8200. "Roi stood out at modu, as a very happy person, like an 18-year old kid, even though he was older," Moran told "Globes". "Tiger came to me during Onavo's set-up stage, and told me about his product. I was not enthusiastic, I didn’t think that data compression was important. In 2010, data cost a lot of money, and saving it was very important. Today, that is less so. Onava began with data compression, but it took it to a different place. This is a great success. I think that they did a wonderful thing, and I hope that more modu veterans will succeed."
Published by Globes [online], Israel business news - www.globes-online.com - on October 15, 2013
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