The “Globes” ceremony announcing the year’s “Promising Start-Ups” has become a long-standing tradition. The “Globes” team approaches a large group of venture capitalists, senior Israeli high-tech executives, seasoned entrepreneurs, and people whose businesses are related to the sector, and, each year, for ten years running now, their responses have yielded an impressive list of leading companies with promising potential, each in its own field.
Last year, a number of companies that appeared on this list in previous years joined the parade of exits. The largest high-tech exit of the year was Mobileye, which was included on the list exactly ten years ago, the first year the list was published. With this development, the group of companies from the 2005 list reached a 70% success rate, a figure that would be very pleasing to any top global venture capital firm.
Other successes include BorderFree, which was on the 2012 list (under its previous name, FiftyOne), which held a Wall Street IPO this year, SuperDerivatives, from 2006, which sold to ICE from $350 million, PrimeSense, from 2010, which was sold to Apple, and even last year’s list has already seen an impressive exit, with the sale of Cyvera to Palo Alto in March, for $220 million. And to remind us that the world of high-tech has failures as well, we have Optier, which was on the 2007 list and is probably the year’s most painful failure, with its May announcement that it had reached the end of the road, despite having had a few good years, and an impressive $120 million in funds raised.
The inclusion of a company in the “Globes” top-ten list of “Promising Start-Ups” is no trivial matter. The opinions of a large group of professionals, who have seen a thing or two in Israeli high-tech, and have been partners to both successes and failures, are factored in, and those concerned do not discuss their votes with each other. To be included in this list, a company must possess significant assets, including unique technology, a promising launching-point in its target market, financial investment that demonstrates investor confidence, and preliminary evidence that commercial success is an attainable goal. Each year, dozens of Israeli companies reach this level and become candidates for inclusion in the top-ten list. Attaining eligibility for candidacy is a significant accomplishment, in and of itself.
According to a study published by research organization IVC at the end of last year, in the ten previous years, 6,900 start-ups were founded and received investor financing. By the end of 2013, 2,800 of these companies had closed, and 800 had made exits. Accounting for the fact that many of the companies seeking seed financing do not even reach the starting line after the first investment round, we can grasp the magnitude of the accomplishment of a company that is considered, a number of years later, against all odds, to be one of Israeli high-tech’s most promising. And this is why the matter is so meaningful for the entrepreneurs that have earned the honor of being included in the list published by “Globes” tonight.
But, this year, it is important to note another aspect of this accomplishment. Just three months ago, the country was in as state of emergency on account of the war in Gaza. Over the course of fifty days of fighting and weeks of a state of emergency before returning to routine, Israeli high-tech, like other sectors in the economy, was subjected to a difficult test of survival and determination. Many entrepreneurs left their start-ups to join the ranks of fighters. Many employees were drafted for long weeks. Thousands of Israeli high-tech companies conducted business with clients and business partners abroad - in between racing to bomb shelters during air-raid sirens, worrying about children at home and family members on the front lines, worrying about the need to support a company with limited manpower on account of the number of employees drafted for reserve duty - and they managed to project “business as usual,” and to release products on time, provide support for the companies’ clients, and promote the companies’ businesses.
The thousands of companies that did this successfully, preserved the leading image of Israeli high-tech, and in so doing, they all deserve to be included among the list of winners. The ten leading companies that have been chosen this year are representatives of an entire generation of Operation Protective Edge companies, and, for this reason, they, and everyone they represent deserve a special salute from all of us. We wish that the promise inherent in each and every one of them will be realized quickly, and that Operation Protective Edge will be the last war, for them, and for all of us.
The writer is a general partner at Canaan Partners
Published by Globes [online], Israel business news - www.globes-online.com - on October 30, 2014