Israeli company ColorChip is in negotiations for its sale to a Chinese company for $300 million. The deal has not yet been finalized, but a source familiar with the details said that the three main investors in the company, the BRM, IGP (Israel Growth Partners) and Gemini funds, would receive $60 million each. The prospective deal signals continued interest by Chinese companies in Israeli technology companies, and the industry sees further such deals ahead. The Chinese semiconductor industry has seen a surge in development recently, with government backing, with the aim of challenging US leadership in the global market.
Yokne'am-based ColorChip has developed high bandwidth electro-optic components for data transmission in the datacenters of large enterprises. Among its customers is Facebook, which uses the Israeli components in the datacenters it operates in various countries. ColorChip was founded in 2001 by Eli Arad, who serves as VP Research and Development, Shimon Eckhaus, and Prof. Shlomo Ruschin. The company's CEO is Yigal Ezra.
ColorChip has a bleak history of layoffs and downsizing, which brought it to the brink of liquidation in 2009, but restructuring and repositioning led to penetration of new markets and to further fund-raising from venture capital funds. In total, the company has raised $97 million. In April 2017, it raised $37 million in a round led by the CIRTech and Scale-Up funds. The Vertex and Bessemer were investors at the early stage.
Published by Globes [online], Israel business news - www.globes-online.com - on August 27, 2018
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