Although Intel Capital has been active in Israel for 11 years, until now, its investments have always been made with the secrecy worthy of an intelligence agency. However, the company has recently begun to loosen the binds, and for the first time, Intel Capital Central and Eastern Europe, Russia & Israel managing director Ashish Patel held an interview. Hel said today, “We want to increase Intel Capital’s investments in Israeli technology companies.”
Patel replaced Shlomo Caine, who managed Intel Capital Israel until leaving the company two months ago to become a consultant for private companies.
Even before today’s declaration, there was no reason for Israel’s high-tech industry to feel ashamed by its share of Intel Capital’s investments. Patel said that 27% of the company’s total investment in the region was channeled to Israel. The company invested $1.07 billion in 91 companies in 24 countries in 2006. 60% of the companies are not in US companies.
Intel Capital has invested $170 million in 60 Israeli companies to dates. Half of these start-ups have either gone public or been acquired. “In the past 18 months, we made seven new deals in Israel,” said Patel. “Our recent exits in Israel were in mobile internet, WiMAX, home digital, enterprise software, and in products that can be included in Intel’s future products basket.”
Intel Capital’s investments in Israel include Jajah Ltd., Lucid Information Technology Ltd., Mobixell Networks Inc., Montilio, php developer Zend Technologies Ltd. and two semiconductor companies, whose identity Patel declined to disclose.
Recent exits include Mellanox Technologies Ltd. (Nasdaq:MLNX), Jungo Software Technologies Ltd., Passave, Gigaspaces, and Topio.
“Globes”: What companies do you invest in?
Patel: “Our commitment is to finance entrepreneurs with excellent ideas that can succeed. In the past, we’ve invested in companies such as Passave, Jungo, and Gteko, which started in Israel and went global. We help build companies, mediating with customers or potential buyers. We don’t necessarily plan to swallow the companies we invest in.”
What makes you unique compared with other venture capital funds operating in Israel?
“Our technological capability. We understand in depth the advantages and disadvantages of ideas. We have the capability to help companies become global. You should remember that, until ten years ago, the main market for technology products was the US, whereas now the main markets are India and China. We have teams in both countries, and few venture capital funds have this access to these new markets.”
What are your areas of investment?
“We have two kinds of investment. The first is ecosystem-type investments and the second is hole-plugging, which are not necessary supplementary to Intel products, but might become part of Intel. The investment in Jungo was the second type. The company developed a product for the home digital market, and we integrated it into our package for this field. The investment in Jajah was the first type.”
How do you help your portfolio companies?
“We arrange meetings for them with top executives in their target industries and monitor their progress. We’re committed to investing in Israel. It’s a superb target and is on par with our commitments in India, China and Russia.”
Some Israelis see India and China’s rapid growth as threats.
“I see their growth as opportunities, not a threat to Israeli industry. After all, Israel doesn’t see the US as a threat. The world moves and entrepreneurs must identify the big markets. Geographically, Israel is situated vis-a-vis China and India the same as vis-a-vis the US, and ought to leverage this. Israel has a global record in building global companies, and there’s no reason why Israeli companies can’t sell to China and India.”
Is your purpose is to make money like a venture capital fund or to locate companies for Intel’s product line?
Intel Capital senior investment manager Steve Gray: “Our aim is to generate a return on investment, just like a fund. Naturally, we also want technologies that can enrich Intel’s products. We’re Intel’s eyes and ears on the ground. We see what’s happening and can bring innovations to the attention of Intel’s divisions.”
Published by Globes [online], Israel business news - www.globes.co.il - on June 12, 2007
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