Amazon has confirmed its intention to acquire Annapurna Labs, a manufacturer of networking chips, in a deal that could well end up being worth more than $400 million. While the Israeli start-up remains secretive on what it is working on, the consensus among commentators is that it will play a key role in boosting the performance and cutting the running costs of Amazon’s AWS cloud computing business.
Last week was a big one for Israel’s tech scene. In addition to the Amazon / Annapurna deal, mobile software management company Red Bend was purchased by Harman International Industries for an estimated $170 million.
The acquisition of Annapurna and Red Bend is emblematic of what is going on in the region right now. Tel Aviv-based tech writer Dennis Mitzner believes that Israel is becoming an “exit nation”, as more and more companies in its burgeoning start-up economy begin to attract investors. A recent hi-tech exit report by PwC suggests the same; Israeli start-ups racked up $5 billion in M&A transactions and $9.8 billion in IPOs last year.
The growing relationship between China and Israel hasn’t gone unnoticed. Last year saw a number of Chinese groups investing in Israeli enterprises, and just last month, eCommerce behemoth Alibaba acquired Herzliya-based QR code company Visualead. “In the past you would tend to see more American companies followed by European companies acquiring Israeli start-ups,” says venture capitalist Yaron Carni. “Nowadays it is evident that China has developed an ever growing appetite for Israeli tech. Both trends are good and diversity of start-ups pollinates the ecosystem.”
What is it about Israel that warrants all of this global attention? “While there seems to be a general hype around IoT (Internet of Things), security and fintech, I find Israel to be a very unique place in the fact that entrepreneurs don’t tend to have group think and as such, we are seeing ventures tackling a very wide array of industries,” says Carni. “We have made several investments in the past year since inception (and specifically in the past month) and it is clear that exciting times are ahead for all of us.”
In the education corner of Israel’s hi-tech industry, these “exciting times” are spurred on by friendly competition. This week, the Israeli organisation MindCET launched its second annual ‘Global EdTech Startup Awards’ contest, which seeks to foster and promote the most innovative technology solutions that will make a difference to education all over the world. Last year’s winner was BrightBytes, a US-based provider of analytics and assessment data tools, which beat 350 other international entries. This year’s initiative, also organised by Wayra UK and the UK Israel Tech Hub, will tap hotly buzzed areas like the Internet of Things, the maker’s movement, and cyber-security.