UAE's Edge Group buys 30% stake in Israeli defense co Thirdeye

Thirdeye Systems CEO Lior Segal credit: Yakir Shukrun
Thirdeye Systems CEO Lior Segal credit: Yakir Shukrun

Thirdeye develops electro-optical recognition systems for drones integrated with AI capabilities.

In an unusual defense industries collaboration between Israel and the UAE, Thirdeye Systems (TASE: THES), which develops electro-optical recognition systems for drones integrated with AI capabilities, today announced that it has signed an agreement and established a joint venture with Abu Dhabi's Edge Group.

As part of the agreement, Edge will invest $10 million for a 30% stake in the Israeli company and will become Thirdeye's biggest shareholder. The deal will require approval by Israel's Ministry of Defense.

Thirdeye's market cap is $23.3 million, while the deal reflects a valuation of $31.1 million - a 25% premium. However, it should be remembered that this is a small and extremely volatile stock. For example, after the outbreak of the war, the stock tripled in value within six months, but since the peak in May 2024, it has plunged 50%.

In addition, the parties will establish a joint venture in which Edge undertakes to invest $12 million. Edge will hold 51% of the shares of the joint company, Thirdeye will hold 43% and a third party will hold 6%. According to Thirdeye, the joint company will engage in the development, commercialization and marketing of electro-optical identification systems, focusing on certain territories around the world.

The buyer: A conglomerate with an order backlog worth $12.8 billion

Edge is a UAE tech and defense group founded in 2019, which brings together more than 25 companies specializing in military and civilian solutions and has over 12,000 employees. The company operates in 140 countries, and its order backlog is $12.8 billion. The group develops advanced technologies, including unmanned systems, electronic warfare, cybersecurity, air, land and sea systems, as well as precision weapons systems. It aims to provide innovative and rapid solutions for the defense and civilian market, while collaborating with international partners and adopting advanced technologies such as autonomy, robotics and smart materials.

Thirdeye was founded in 2010, and held its IPO in 2021. The company develops advanced AI-based solutions for optical systems and autonomous tools, with an emphasis on security and defense. The company specializes in edge AI applications, providing real-time image processing technology for surveillance and control in challenging conditions. Over the past three years, the company's share price has risen 10.8%, but in the past three months has fallen 38.1%.

The company's solutions provide a rapid response to changing threats, including protection against drones, something Israel was clearly not prepared for in the war. Thirdeye products are designed to be mobile and operate 24/7, while providing an optimal response to operational units in the field. The solutions focus on combining AI with defense and security control systems.

However, the company's results are far from positive. Despite a significant 71% jump in revenue, sales only reached NIS 9.8 million in the first half of 2024. Gross profit jumped by only 41% to NIS 3.8 million, with an operating loss of NIS 902,000 in the first half of the year, while a jump in financing expenses actually deepened its net loss by 26% to NIS 3.2 million.

In addition, the company recorded negative cash flow from operating activities of NIS 3.2 million and it only had NIS 7.1 million cash on June 30, 2024, mainly due to a loan from an investor. The company's total assets at mid-year amounted to only NIS 22.4 million.

EDGE Group President and CFO Rodrigo Torres said, "This transaction reflects our confidence in Thirdeye Systems' solutions, which provide a critical layer of protection in unmanned aerial vehicle detection. We believe this collaboration would benefit both parties and accelerate the development of new products to enhance identification capabilities in the evolving modern warfare."

Thirdeye Systems CEO Lior Segal added, "We are excited to collaborate with EDGE Group, a global leader in defense technologies that has expressed confidence in our company. This technological and security partnership sends a strong message about the capabilities of our AI-driven products and their contribution to national security. Aligning efforts with a company of EDGE’s caliber presents a significant opportunity to advance innovative technological solutions. We are confident that this collaboration will significantly boost the growth and development of Thirdeye Systems and reinforce our position as a leader in international electro-optical detection systems. Partnering with a globally recognized supplier like EDGE will help us showcase Thirdeye Systems' technological advantages and further expand our footprint in additional international markets."

Published by Globes, Israel business news - en.globes.co.il - on January 28, 2025.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2025.

Thirdeye Systems CEO Lior Segal credit: Yakir Shukrun
Thirdeye Systems CEO Lior Segal credit: Yakir Shukrun
groundcover founders credit: Yossi Yarom Israeli observability co groundcover raises $35m

groundcover has developed a “Bring Your Own Cloud” (BYOC) observability solution, redefining the architecture of a modern observability platform.

Tel Aviv Stock Exchange credit: Shutterstock MagioreStock Foreign investment in TASE hits five-year high

Foreign investors have been flocking to the Tel Aviv Stock Exchange in recent weeks, the TASE research department tells "Globes."

Elbit Systems tank turret systems credit: Elbit Systems Elbit Systems wins $100m tank turret systems deal

The Israel defense electronics company will supply its advanced UT30 MK2 unmanned turret systems to General Dynamics European Land Systems (GDELS) to be supplied to a NATO European country.

Tomer Weingarten Photo: PR Trump targets SentinelOne exec in act of revenge

The US administration has suspended the security clearance of the company's chef intelligence and public policy officer Chris Krebs and everyone associated with him.

Tel Aviv Stock Exchange share prices rising credit: Tali Bogdanovsky TASE opens sharply higher after Trump U-turn on tariffs

The pause is being interpreted as a climb down after US President Donald Trump admitted he had made the move to calm the markets.

Ashot Ashkelon credit: Ministry of Defense Up 250%, Ashot Ashkelon wins another Defense Ministry order

The Israeli defense company's share price has risen 250% in the past three years since FIMI Opportunity Funds acquired control.

Liad Agmon credit: Eyal Izhar Insight Partners Liad Agmon steps down as managing partner

Serial entrepreneur Agmon has served as a partner at Insight Partners Israel alongside Daniel Aronovitz who set up the Israel office.

Shekels credit: Shutterstock Vladerina32 Shekel slide resumes amid escalating tariff war

The Bank of Israel is not expected to intervene in the forex market despite the sharp depreciation of the shekel.

Nir Zuk credit: Inbal Marmari Palo Alto Networks mulls buying AI security co for $700m

Sources inform "Globes" that on Palo Alto's radar is Protect AI.

President Donald Trump hosts Prime Minister Benjamin Netanyahu credit: Reuters Kevin Mohatt Israeli officials confident on US tariff concessions

Senior Israeli figures believe that concessions could be tied to progress on strategic regional political issues that are important to President Trump.

Phoenix Investment House CEO Avner Hadad  credit: Tommy Harpaz "The market has priced in all the bad things"

Phoenix Investment House CEO Avner Hadad says US markets could continue to fall, but that we are close to interesting territory for patient investors.

Tel Aviv credit: Shutterstock Tel Aviv slips in World's Wealthiest Cities ranking

Tel Aviv's position as one of the world's wealthiest cities took a big knock over the past year as it slipped from 42nd to 48th in investment advisors Henley & Co.'s "World's Wealthiest Cities" Top 50 ranking.

Leviathan platform  credit: Albatross C'ttee seen recommending no cut in gas exports

The Dayan committee on the future of the gas sector estimates that Israel's natural gas reserves will run out in 2045.

Accountant General Yali Rothenberg credit: Rafi Kutz Israel's fiscal deficit continues to narrow

The deficit narrowed in the twelve months to the end of March 2025, for the sixth consecutive month, Ministry of Finance accountant general Yali Rothenberg reported today.

Arkia credit: Arkia Arkia cuts Tel Aviv - New York April fares

Arkia has cut fares at the last minute, a time when prices usually soar even higher, according to the pricing method used in the industry.

Bank of Israel Governor Prof. Amir Yaron credit: Dani Shem Tov Knesset Spokesperson BoI Governor: US tariffs could push up inflation in Israel

Prof. Amir Yaron tells "Globes" that there is a risk that the new tariffs will cause inflation to rise in the US, with a knock-on effect for Israel.

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018