Investors raised $7 billion from stakes in Israeli tech firms

[January 06, 2015]  JERUSALEM (Reuters) - Investors raised $6.94 billion from selling stakes in Israeli technology companies in 2014, a five percent increase on the previous year, boosted mainly by an increase in stock market listings.

It was the third-highest figure after 2006 and 2012, years marked by major acquisitions of Israeli companies, the IVC Research Center and Meitar Liquornik law firm said on Tuesday.

The technology sector is a major growth driver in Israel's economy, accounting for more than 50 percent of industrial exports. Companies often tap into the skills of workers trained in the military or intelligence sectors and start-ups benefit from tax breaks and government funding.

"2014 was an excellent year for Israeli high tech even though there was not a mega deal," said Koby Simana, chief executive of the IVC Research Center.

Led by vehicle safety company MobilEye, which raised $890 million in New York in July, there were 17 Initial Public Offerings (IPOs) by Israeli companies last year.

They raised a total of $2.1 billion -- up from eight IPOs amounting to $360 million in 2013.

Acquisitions or mergers involving Israeli or Israel-related firms were valued at $4.8 billion, down from $6.2 billion in 2013.

Simana estimated 15 to 20 Israeli companies will likely go public this coming year, most of them on Nasdaq.

"There is a strong pipeline of Israeli companies that want to go to IPO on various stock markets, mainly in the United States," he told Reuters.

He pointed to online marketing start-ups Outbrain and Taboola that will likely have successful offerings this year.

"We see more companies turning into businesses rather than selling their IP (intellectual property)," Simana said. "It's a good sign and good news for Israel."

(Reporting by Steven Scheer; editing by Keith Weir)

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