Key Insights October 21, 2015 - Credit Suisse · PDF fileKey Insights October 21, 2015 2015...

Key Insights October 21, 2015

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s Global Tech Trends and IPO Landscape

“ There are trillions of dollars seeking to be invested but there are less then 100 qualified technology stocks to invest; the result is that the private market is starting to dwarf the public market. ” John Metz, Managing Director, Global Technology Banking Division,

Credit Suisse Investment Banking, San Francisco

Pre-IPO Market Trends

“ Going public is like moving from college sports to the pros – you need to ratchet up your game and prepare well in advance. ” Adam Kostyál, Head of International Listings, Nasdaq, Stockholm

Private Equity – A Viable Partner for Growth Companies

“ Private equity can plug the funding gap between early stage Venture Capital and IPO. ” Richard Sanders, Co-Head of Global Technology Team, Permira, London

Sources of Capital for an Israeli High-Tech Company

“ High valuations are forcing VCs to be more selective than ever before. ” Alan Freudenstein, Managing Partner, Credit Suisse NEXT Investors, New York

“ Pre-IPO valuations may be up but these companies are really changing the world and how we live our lives. ” Gigi Levy-Weiss, Angel Investor, Tel Aviv

“ The funding gap between seed stage and the VCs creates a great opportunity for Crowdfunding platforms. ” Laly David, Business Development Director, OurCrowd, Jerusalem

“ If you really want to build a huge company, you must go public. It is not a question of ‘if,’ it is a question of ‘when’. ” Assaf Ben Ami, CFO, IronSource, Tel Aviv

“ The value in going public includes better access, transparency, recruiting… but it must be part of an overall growth strategy, and management has to be committed. ” Asaf Homossany, Senior Managing Director EMEA, Nasdaq, London

“ We need to shift from building great products to building great companies, we need to keep on dreaming of changing the world; And if a storm comes up, act like a sailor to not get sick: watch the horizon, not the waves. ” Shlomo Dovrat, Founder & Managing Partner, Carmel Ventures, Tel Aviv

32015 High-Tech Forum: Tel Aviv

On October 21, 2015, Credit Suisse hosted its second annual High-Tech Forum in Tel Aviv bringing together 200 selected high-tech entrepreneurs, investors and experts from Israel, Russia, Eastern Europe, the UK, the Nordic countries, and the US. By joining forces across Private Banking and Investment Banking, Credit Suisse strives to be the number one bank for high-tech entrepreneurs in Israel: we provide growth companies access to the exclusive investor network of the Private Bank and, vice versa, introduce Private Banking clients to promising companies covered on the Investment Banking side.

The focus of this year’s Forum was on “trends in sourcing growth for Israeli high-tech companies” and was hosted in partnership with Nasdaq, and OurCrowd, a leading equity crowdfunding platform. John Metz, Managing Director of Global Technology Banking Division at Credit Suisse Investment Banking in San Francisco, opened the Forum discussing the paradox that megatrends in technology create addressable markets and larger opportunities than ever before. Nevertheless, investors increasingly face difficulties to find sufficient investable opportunities in public markets as wealth generation moves more and more to the pre-IPO stage.

Adam Kostyál, Head of International Listings at Nasdaq and based in Stockholm, shared his thoughts on key factors that companies should consider when growing a business towards a public company. In particular, he emphasized the importance of a well-diversified, more resilient revenue portfolio and illustrated this using the example of Nasdaq itself, which is now venturing into services for companies pre-IPO to address this growing demand on the back of the deep capabilities Nasdaq has built in this space.

Richard Sanders, Co-Head of the Global Technology Team at Permira in London then challenged the perception of private equity as an asset-stripping, debt-burdening, control-ridden industry and demonstrated with concrete investment cases from Permira how private equity can be a viable partner in plugging the funding gap between early-stage venture capital and the IPO.

This last point in particular was intensely debated in the subsequent panel discussion led by Philippe Cerf, Co-Head of EMEA TMT at Credit Suisse Investment Banking in London. Panelists voiced the concern that, while the Israeli high-tech sector overall is increasingly attracting attention and capital from around the world, most of it is chasing the same unicorns and a decreasing share is risking investments at earlier stages where entrepreneurs need it the most. Here new concepts such as crowdfunding platforms like OurCrowd can close an important gap.

With that in mind, the Forum reached its culmination in the Pitching Ring Award 2015 which, this year, was sponsored in partnership with OurCrowd’s seed fund OurCrowdFirst. Five innovative start-ups out of over 50 pre-selected contestants pitched in four minutes each. After an electronic vote among the audience, CodeMonkey, a software company that teaches children computer programming in a playful way and reaches kids also in less privileged areas of the world, won this year’s award.

With the Pitching Ring Award, Credit Suisse supports innovative Israeli high-tech entrepreneurs from an early stage, helps them with its global network and leading capabilities in technology banking to grow towards a mature company, and establishes close partnerships for the bank for the long term, both on the Investment Banking and the Private Banking side.

Helping High-Tech Entrepreneurs Create and Preserve Wealth – Private and Investment Banking Join Forces in Israel

Visit www.credit-suisse.com/ hightech to learn more about how we help high-tech entrepreneurs in Israel create and preserve wealth, and to subscribe to news and insights for the high-tech community.

http://www.credit-suisse.com/hightech


4 2015 High-Tech Forum: Tel Aviv

Welcome Note

Thomas Schornstein, Market Leader for Israel and Managing Director of Credit Suisse Private Banking in Zurich, welcomed 200 guests to the second Credit Suisse High tech Forum in Tel Aviv. In a filled-to-capacity space perched above a leafy courtyard in Tel Aviv’s historic Neve Tsedek district, Mr. Schornstein set the stage for the day’s presentations, for an attentive audience of high tech entrepreneurs, serial entrepreneur-investors, venture capitalists and private equity managers, speakers, and Credit Suisse staff who had gathered from Israel and around the world.

Mr. Schornstein’s brief remarks underscored Credit Suisse’s philosophy and commitment to engage with high tech ventures from an early stage with knowledge, experience, and financing, with a readiness to be integrally involved with deal making at each state of the startup’s lifecycle, including private placement and IPO.


Mr. Metz posed the question “What is creating value in the technology landscape?”Mobility, Cloud, Social, and Big Data comprise four of the major mega trends in the technology world. An attractive growth opportunity exists if a company addresses one or more of these trends. Because these trends cross industries, geographies, and demographics, they intersect across a horizontal, not vertical landscape.

1. IPO and Private Placement Market Landscape:Investors must consider the total addressable market of a particular technology. From perhaps 1 million units in the mainframe era to 10 billion mobile device units, each new computing cycle has presented larger opportunities than the last. Some investment players are now only investing in addressable market opportunities of hundreds of millions of units.

“Technology money is looking for at least 30 % growth,” said Metz. “There are trillions of dollars available, but less than 100 qualified investment opportunities in the public markets.” The result, he noted, is that the private market is starting to dwarf the public market. “This is creating a unicorn feeding frenzy,” he continued, “Big VC’s are now dollar cost averaging into a future equity position by investing pre-IPO. There are deep incentives to undergo a much longer gestation period before IPO. By the time companies go public these days, they are no longer growth opportunities.”

Meanwhile, we are seeing up to 6 years of revenue multiples in private companies. “Is it a bubble?” posed Metz, “No, it is pure Adam Smith supply and demand economics, and will see sustained revenue multiples longer than ever before.” As for value creation after IPO, however, Metz quoted a leading Google VC investor: “You will never see a Google-like return on IPO investment again.”

2. Themes in Technology:“Mega trends like on-demand, the sharing economy, online education, and digital health are turning technology verticals into horizontals as these trends permeate the entire economy,” posited Metz, “While people are already accustomed to one-click digital interaction, there is now a shift to on-demand consumption and fractional labor.” Some figures suggest that 48 % of the labor market is already on-demand labor, with 100 new on-demand companies formed in the past year alone. This has enabled enormous avoidance of infrastructure expense worldwide – For instance 56.6 hotels in New York City that do not need to be built, because of Airbnb.

Online education, meanwhile, is “fixing a broken system.” The solution is coming in the democratization of education though online offerings like Stanford University’s “Intro to AI” course, which evolved from only 200 students in the classroom to 160,000 students online.

In Healthcare, which accounts for 20 % of the annual economic cost in the US, digital sensors and patient data analytics are correcting inefficiencies in the system and delivering 300 – 450 billion dollars in cost savings.

3. Spotlight on Security:IT transformation is made possible by distributed hardware systems and borderless IT environments. While that empowers scale and reach, it creates huge security risks, with hundreds of annual breaches exposing 1 billion records. “With these challenges,” said Metz,

“come huge opportunities for emerging security companies.”

I. Global Tech Trends and IPO Landscape

Presented by: John Metz

Managing Director, Global Technology Banking Division,Credit Suisse Investment Banking, San Francisco

John Metz has 22 years of experience in the technology banking sector. He has led over 30 technology IPO’s, advised over 100 billion dollars in technology mergers and acquisitions, and overseen over 1 billion dollars in technology private placements. Based in San Francisco, Mr. Metz focuses primarily on enterprise, cloud, and communications infrastructure, security, virtualization, networking, and storage. The impressive list of companies Mr. Metz has advised includes Cisco, HP, Dell, Palo Alto Networks, and SanDisk – whose acquisition by Western Digital, Mr. Metz revealed, had been announced just one hour prior to the conference.


1. Nasdaq is the Market for Technology InnovationNoting that most of Nasdaq’s International IPOs are coming from Israel, Mr. Kostyal began by noting that the tiny country is Nasdaq’s largest market outside of the USA. While concurring with John Metz’s assertion that there is a trend for a longer runway to IPO these days, Kostyal re-asserted the significance of the public markets and shared with the audience Nasdaq’s enhanced role in supporting the private market.

“Nasdaq is sector agnostic but tech is at the core of Nasdaq’s DNA,” said Kostyal, “60 % of new technology listings and 73 % of public technology companies are on Nasdaq. We offer better investor targeting, brand alignment, and cost efficiency for tech companies.”

2. The Road to IPO Companies need to have predictable and visible goals before they are ready to go public.

“If you can’t get that story across and meet the goals, then don’t go public,” Kostyál cautioned. “Moreover, don’t stand on one leg. A company’s ability to diversify its business model across different segments is key to reducing the vulnerability of the public markets.” Mr. Kostyál pointed to two trends in pre-IPO companies: larger valuations and startups acquiring startups.

“The number of 1 billion-dollar-plus valuations of late-stage private companies between 2013 to 2014 jumped from 8 to 21,” said Kostyál, “Meanwhile, with all of this capital, there were more than 450 startup acquisitions in 2015, as late-stage private companies sought to absorb new talent, diversify into more customer segments, and acquire new technology.”

3. Nasdaq’s Role in Supporting Growth CompaniesIn response to the trend of staying private longer, Nasdaq has committed to support growth companies in the private stage, opening a 13,000 square foot entrepreneurial center in 2015, and offering a range of services to support private growth companies. For instance, a SaaS-based platform for managing complex cap tables and waterfall simulation models that offer companies better control and clarity.

Mr. Kostyál says that while the private market will continue to flourish, the public exchanges will remain strong, and he encourages Israeli entrepreneurs to consider Nasdaq on their runway to IPO. Kostyál offered the reduced regulatory requirements of the JOBS act, access to US capital, higher sector valuations, lower listing fees, and a suite of corporate services as reasons Nasdaq is attractive to international companies looking to list.

II. Pre-IPO Market Trends

Presented by: Adam Kostyal

Head of International Listings, Nasdaq, Stockholm

Adam Kostyal has worked for Nasdaq for 12 years, rising to Senior Vice President of the Global Corporate Client group and head of International Listings. He has rich experience in sales, account management, and business development in the European region and is responsible for the Nordic exchanges and some 120 companies dual listed or primarily listed on Nasdaq US.


Mr. Sanders began by proposing that “brainpower is Israel’s most significant natural resource.” Israel has more companies per capita than any other nation on Earth and a huge cast of successful technology companies. “Why then,” asked Sanders, “are there so few global Israeli players?” He cited exits averaging less than four years, challenges attracting global management talent, and a preference for early stage venture capital investment in the country as possible reasons.

“Private equity can plug the funding gap between early-stage Venture Capital and IPO,” said Sanders, “This can help build global leaders while providing an exit to early investors.” But first four myths about Private Equity investors have to be addressed:

Myth 1: Private equity is about cutting costs and selling assets. PE investors don’t care about stimulating growth.

Reality: PE-funded companies outperform public markets by 60 %

Myth 2: PE investors load up with leverage which starves growth as all the cash flow goes to debt pay-down

Reality: The average leverage to equity ratio is about 50 %

Myth 3: PE investors are “control freaks” who tell everyone what to doReality: PE investors are “dogmatic about influence, but not about control,” are willing to use

different structures to cater to different situations

Myth 4: PE is a homogenous industryReality: PE is a mature industry with different strategies, including growth oriented strategy

“Because its roots were as Venture Capitalists in the 1980’s,” explained Sanders, “the DNA of Permira is growth focused. We have 28 billion in investment, including 8 billion in tech. 48 % of the last fund was focused on tech companies and has resulted in growth of 22 %.” Sanders let the attending crowd know that Permira wishes to help companies go global, offering several examples, including Team Viewer and Genesys, which Permira helped enter new markets and Legal Zoom whose failed IPO bid led to an investment by Permira to help build subscription business which has resulted in a 65 % increase in profit in 12 months.

III. Private Equity – A Viable Partner for Growth Companies

Presented by: Richard Sanders

Co-Head of Global Technology Team, Permira, London

Richard Sanders, Co-Head of Global technology at Permira and a member of the firm’s investment committee, has been a Permira partner since 2006. He has worked in London and Silicon Valley on investments including ABS, Ancestry.com, and Genesys, and is a board member of several Permira invested firms.


The panel assembled to debate sources of capital for Israeli high-tech ventures and other pressing issues in the innovation and investment communities. The following is a record of the lively discussion:

Do Israeli high-tech companies need to go outside of Israel to find funding?The first question sought to root out the potential missing links in Israel’s funding eco-system by asking the panelists when startups need to go outside of Israel to find financing. The panelists concurred that the role of Venture Capitalists is changing. As angel investor Gigi Levy-Weiss pointed out, “VCs who once invested in the first or second stage now wait longer and invest in the third or fourth stage. There is a gap from

seed funding to that 3-5 million dollar VC check,” said Levy-Weiss.

As a result, new funding sources, like equity crowdfunding, have emerged to fill the gap. Laly David, from OurCrowd shared his company’s story:

“OurCrowd is investing alongside over 10,000 investors in deals across various stages. We are gaining access to opportunities because of the gap.”

The problem extends to corporate investors as well, added Credit Suisse NEXT Investors’ Alan Freudenstein.

“Corporate investors invest along with deals where they can leverage knowledge, due diligence, etc. – mostly investing in 15-20 million dollar deals.”

So what’s behind this trend in the Israeli high-tech scene? What has become of the days when there was ready capital

for early-stage companies? According to serial entrepreneur/venture capitalist Shlomo Dovrat, “Israel is transitioning from building great products to building great companies. We are moving from being a community focused on early stage to becoming a real hotbed of global unicorns,” posited Dovrat, “There was 4.2 billion dollars investment in Israel this year. About 80 % of that is focused on growth stage, not early stage.”

The angel investor Gigi Levy-Weiss demurred. “There is still a lot of available money for good companies at the early stages,” he held, “Those companies who fail to find financing may in fact simply be the weakest options available to investors.”

What all the panelists agreed upon was that companies in Israel are starting

IV. Panel Discussion: Sources of Capital for an Israeli High-Tech Company

Moderator:

Philippe CerfCo-Head of EMEA Telecom, Media and Technology, Managing Director, Credit Suisse Investment Banking, London

Panelists:

Alan FreudensteinManaging Partner, Credit Suisse NEXT Investors, New York

Assaf Ben AmiCFO, IronSource, Tel Aviv

Asaf HomossanySenior Managing Director EMEA, Nasdaq, London

Gigi Levy-WeissAngel Investor, Tel Aviv

Laly DavidBusiness Development Director, OurCrowd, Jerusalem

Shlomo DovratFounder & Managing Partner, Carmel Ventures, Tel Aviv


to focus on building strong, profitable growth companies rather than simply tapping financiers to stay afloat. As IronSource CFO Assaf Ben Ami concluded, “Companies in Israel know that the best model is to make the business profitable early, and not be entirely reliant upon funding.”

Where are the Israeli Unicorns?Unicorns – startups with valuations exceeding 1 billion US dollars – have become the darlings of the investment community as companies stay private longer and longer these days. The moderator Philippe Cerf questioned why there are fewer unicorns in Israel than in Europe, despite the high volume and quality of companies being created. The panelists were invited to weigh in on what they think is responsible for this alleged dearth of the mythical late-stage startups.

Challenging the premise of the segment from the outset, Gigi Levy-Weiss advocated that the aggregate number of unicorns in Israel actually equals those from all the EU countries combined, a statement which elicited substantial debate among the panelists.

True or not, Assaf Homossany suggested that one explanation might lie in the difficulty of raising very large capital sums in Israel. “In the EU, there are more alternative capital markets,” said Homossany, “When you get to the 50-100 million dollar check in Israel, it is much harder. The Chinese are coming in and it is happening, but Israeli companies don’t have as much opportunity to raise that deal size.” Alan Freudenstein agreed. “In Israel there is no ‘Fidelity’ or other huge players that raise a ton of money they must place and hold positions on.”

Often the contrarian voice in this panel, Shlomo Dovrat challenged this idea. “Building a unicorn is more about the entrepreneurs. I have a 300 million dollar growth capital fund. The challenge is that Israel does not have enough companies with bigger ambitions and appetite for risk. This has to do with product strategy, the executives, and how global their vision is.”

Shlomo found immediate support from Alan Freudenstein, who called this a “mindset issue.” Israeli entrepreneurs, he said, “don’t have the stomach and expertise that is needed for that large of a vision. They prefer to pull the rip cord and get out early.”

But are Israeli entrepreneurs really that different from their counterparts in the EU? Not according to Levy-Weiss, who pointed to an alternate explanation for

LTR: Shlomo Dovrat, Assaf Ben Ami, Asaf Homossany, Alan Freudenstein, Laly David, Gigi Levy-Weiss, Philippe Cerf


the presumed lack of unicorns. “What is different in Israel is that there are a lot of MNCs here with a hunger for creative Israeli companies. Many more companies are being acquired at an early stage. It is hard for them to say no to acquisition money.”

Dovrat summed up the session with a profile of a business executive market in transition. “There is not the same talent pool like Silicon Valley,” he held, “but still it is a pretty good pool of management talent, with better access to talent from the Valley now as well. At IronSource, the CEO and other founders are under 40. At Outbrain, the CEO is in the US, he’s 43 and sold his first company for 340 million dollars. At Payoneer, the CEO is on his second company.”

With such high valuations in private rounds, is there any reason to go public?Much of the focus of the day’s discussion had been on this very subject. Company valuations are growing larger and larger at the late private stage, while some IPO valuations have been flat or even down from the pre-IPO

valuation. Why even go public at all, then, posed the moderator?

Assaf Ben Ami answered first. “If you really want to build a huge company, you must go public. It is not a question of ‘if,’ it is a question of ‘when.’ IronSource wants to be a huge international player, so for us, eventually going public is part of our blueprint.”

Carrying on with the “not if, when” idea, Alan Freudenstein posited that companies will still go public, they will just do so later than in the past. “As long as the private companies have access to large pools of capital that people are willing to give them, the IPO runway will remain long,” Freudenstein predicted.

Assaf Homossany also felt companies were better off going public in the long run. “The value in going public includes better access, transparency, recruiting, etc.,” he shared, “but it must be part of an overall growth strategy, and management has to be committed.”

Shlomo Dovrat went further, to suggest that the poor IPO showing of Israeli

companies was circumstantial more than a permanent state of affairs. “A lot of Israeli Unicorns are in the AdTech field, suffering from low multiples and negative investor sentiment. In general, the IPO market is dead in the US for these companies, so the few tech IPOs we have seen recently have done very poorly. Most of the IPO valuations were down from the last private round valuation, which does not make sense! This is an anomaly, which will be corrected. Many Israeli companies are IPO ready, but have just not listed yet. We, as investors, should not be overly focused on the short term. In the long term, creating public companies is the way to go.”

“Not only that,” added Gigi Levy-Weiss, “With most of the unicorns, even when the public valuation was lower than the private valuation, the investors still made their money. There’s more than the post-IPO valuation to consider.”When all was said and done, the panel felt that there is still value to Israeli companies in going public. The timing may be delayed, the public valuation may or may not be attractive as


compared with the private valuation, but for a constellation of reasons, IPO is still the way to go.

Changes in the last five years.“What are you saying differently to high-tech growth companies in Israel today than what you said five years ago?” asked moderator Philippe Cerf. Gigi Levy-Weiss was the first to respond:“I was telling people to hold on to money, to be careful. Now people are saying there is a bubble.”

Alan Freudenstein shared those concerns: “I agree that valuations are too high. We are very discerning, ourselves, and therefore not investing in a high percentage of the companies we look at.”

Levy-Weiss was not really convinced, however. “We do not see investors acting foolishly,” he said, “Valuations may be up, but these companies really ARE changing the world. Trends like ‘the sharing economy,’ are truly changing the way we live our lives and will create large economic value within 10 years.”

“Technology changes everything,” added Laly David, “OurCrowd, in just two and a half years, invested 140 million dollars in 80 companies. We are seeing amazing opportunities.”

Assaf Homossany was more specific. “On the 10-year horizon, Agtech, Edtech, and Robotics are the key areas to watch.”

So is there a bubble? Or is there truly a revolution of extraordinary companies that deserve the high valuations that the Israel hi-tech scene is seeing? Assaf Ben Ami put it this way: “It’s not about the environment and whether there is a bubble or not. We must focus on the business. It is important for a business to be profitable so it can wait, and can avoid taking on financing at a discount. This is something that I think more and more companies at the early stages need to adopt.”

Bringing together all these ideas, Shlomo Dovrat pleased the audience with the last word: “For early stage entrepreneurs, we say ‘keep dreaming, think about changing the World’. For growth stage companies, we say ‘Raise money now, because the market is quite choppy.’ For later stage companies, we say ‘Be profitable.’ When there is a real storm, the only way to not get seasick is to look at the horizon, not the waves.”


V. Startup Pitching Ring 2015: Best of Israeli Early Stage Entrepreneurship

Introductions:

Doron Averbuch, Chief Executive of Operations, Credit Suisse, Israel“The pitching ring is a way to support young companies, selected through a rigorous process, on their way to success,” said Mr. Averbuch, “The winner gets the Credit Suisse Scholarship – which includes time with key Credit Suisse advisors, IT professionals, and investment bankers. They also may choose to attend an investment seminar in Israel, the US or Hong Kong, to meet potential investors and customers. What is unique this year is that OurCrowd is partnering with Credit Suisse to select and support the finalists.”

Ori Faran, Founder and CEO of CallVU, Last year’s startup pitch event winner Mr. Faran, CEO of last year’s Pitching Ring award winner CallVU, shared his company’s positive experience as recipient of the Scholarship. From a short video with CallVU co-founder Ziv Orr and Doron Averbuch, we learned how Credit Suisse advised CallVU on finance and management structuring and helped prepare them the for the Credit Suisse Asia Investment Conference in Hong Kong, which was attended as part of its prize. In fact, revealed Mr. Orr and Mr. Faran, thanks to the exposure afforded by their pitching ring win, just three weeks after their win, CallVU received its first round of funding, in the form of a 3 million dollar investment. Watch the full video at: https://youtu.be/E61zpV0ksck

Moderator:

Yori Nelken, General Partner, OurCrowd First, JerusalemMr. Nelken gave a brief intro about OurCrowd. OurCrowd has 15 people on its deal team. They write the first check, then invite accredited investors to join via their web platform, with as little as 10,000 dollars. OurCrowd will invest 100 million dollars this year. It is probably the most active seed investor in the Israel high tech scene. In 2015, the crowdfunding platform introduced OurCrowd First—a specialized 10 million dollar global early stage fund focusing on 20+ seed and Pre-A startups and providing OurCrowd investors even earlier access to promising opportunities. The winner of this year’s Pitching Ring will receive preferred consideration and fast track due diligence analysis by OurCrowd First, with a potential award of up to 500,000 dollars in early-stage financing.

Five startups then came forward, each with just four minutes to make their timed pitch before the entire audience. They were as follows:


Contestants:

ARTWARE, Moti Kintzlinger, CEO GeeMEGeeME is an up-to-date messaging app with an inherent monetization mechanism. Mr. Kintzlinger’s previous two companies were successfully acquired. He said that “Mobile is the dominant way to communicate these days, and selfies are the ultimate expression.” GeeME allows users to silhouette their selfie image against a range of backgrounds in the app’s gallery, which include brand messaging in a non-intrusive way. “This is superior to the annoyance of pop-up ads that occur in most mobile apps,” claimed Kintzlinger. Brands pay according to how many times their images have been used through the app.

AWEAR, Liron Slonimsky, CEOAwear combines fashion with IoT technology by embedding a chip in bags and other fashion items to empower brands with knowledge on how their apparel products are used after the sale. “Customers are incentivized to permit this with loyalty rewards for using or wearing the products,” explained Ms. Slonimsky.” The brand receives data which it can use to personalize communication to the customer through the Awear mobile app. Awear has a pending contract with a 1 billion dollar handbag brand, and has closed a 1.2 million dollar round thus far.

Codemonkey, Yishai Pinchover, VP Business DevelopmentCodemonkey aims to solve the predicted shortage of computer programmers by teaching kids how to program computers with a fun cartoon game whereby they write code enabling their “monkey” to collect “bananas.” The program uses a simplified javascript language called coffeescript. In the 12 months since its launch, Codemonkey has gained 1 million users. Its business model is subscription based, whereby the company sells licenses to schools to use in their computer programming curriculum. Mr. Pinchover revealed that “A deal has been struck with the Israel Ministry of Education which will see Codemonkey adopted in schools nationwide.”

Tapreason, Nimrod Elias, CEO“With thousands of new apps released every day and user acquisition costs increasing, it is a challenge for app owners to improve their distribution,” claimed Mr. Elias, “Most apps fail before they reach critical mass.” Tapreason uses big data to help app developers know the right time to encourage users to share and promote the app. The company has already seen millions of installs of hundreds of apps in just the last month.

Uniper, Rami Kirshblum, CEOUniper takes on the challenge of the increasing costs of elder care by producing a device enabling seniors to live effectively at home longer. The device has large, simple buttons that are easy for older people to use, but are in fact equipped with the latest smart mobile technology.

“The device can be used to locate lost keys or glasses, communicate with loved ones, adjust the television or air conditioner or obtain remote assistance,” offered Mr. Kirshblum, “It also has an analytics engine that learns about the seniors’ behavior and improves performance over time.” The device will cost 200 dollars, with a 6 dollar monthly fee.


GeeMe 8 % Awear 24 % Codemonkey 40 % Tapreason 4 % Uniper 24 %

Please visit www.credit-suisse.com/hightech for more information about the Pitching Ring Award 2015

After completion of the presentations, the audience was invited to vote each for his or her favorite startup, using hand-held remote voting devices that were passed around the room. When the votes were locked in, Codemonkey was selected as this year’s big winner:



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OurCrowd First is OurCrowd’s boutique USD 10 mn per year seed fund for early-stage investments in Israeli and global startups. The fund was raised in spring/summer 2015 and has made a series of seed and Pre-A investments in high-growth sectors including the internet of things, industrial energy, mobile infrastructure, 3D printing and digital radiology. These investments were made together with leading investors including Softbank, Khosla Ventures, Salesforce CEO Marc Benioff, and Artis Ventures. OurCrowd First plans to make USD 250 – 500 K investments in about 20 technology startups, and is being led by General Partners Eduardo Shoval and Yori Nelken.

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Throughout its history, Credit Suisse has been committed to serving entrepreneurs with solutions to meet their changing needs. Since its founding in 1856 by the visionary Swiss entrepreneur and political leader Alfred Escher, Credit Suisse has been known for its record of continuous innovation.

We constantly strive to be a step ahead by understanding your specific goals and aspirations, and by helping you to shape your next chapter.

Credit Suisse has a long-standing track record in advising entrepreneurs on their financial needs and providing industry-leading solutions. We understand the thin line between success and failure and support you in navigating through the following key decisions: How do I create maximum value for my company? Do I have the right internal set-up to be on IPO track? How do I set-up a winning internationalization strategy? What profiles should I look for in my board members? How do I finance growth without losing control over my business? How do I find my first overseas blue-chip investor? What exactly is my company worth and how do I get it valued? What value has to be achieved to plan an exit? How can a pre-IPO founding round best enhance my chances of an IPO? How about staying private?

For many of these choices we have industry-leading capabilities in providing access to capital and executing transactions, such as Private Placements, Pre-IPO Finance, IPOs and Secondary Offerings.

For serial entrepreneurs and private investors we provide high quality advisory and execution platform to manage your private wealth and help you make decisions such as: What changes when I move from being an entrepreneur to being an investor? How much control and involvement am I looking for? How important is entry valuation? How do I deal with failure? How do I look at building a portfolio of investments? What changes when I invest abroad?

Supporting your needs throughout your business and wealth cycle

Source: Credit Suisse


Helping Israeli High-Tech Entrepreneurs to Create and Preserve Wealth

We help create wealth• #1 technology IPO issuer listing international companies in the US (2013 – 2015)

according to FactSet and Dealogic; most active Investment Banking technology practice worldwide

• Successful private placement agent on Wall Street with over 30 billion dollars of transactions in the last ten years

• Tech-related investment vehicles providing access to expertise and growth capital

• Network of wealthy private investors in the Private Bank with over 1 trillion of managed assets

• Credit Suisse itself as a client of Fintech, Cyber Security, Big Data and other IT-related companies

We help preserve wealth • #1 Private Bank in Israel in 2014 and 2015 according to Euromoney;

one of the largest Private Banks worldwide• Access to international markets with booking capabilities in 22 financial centers• Comprehensive offering across investing, financing and wealth governance• Access to the most promising high-tech companies in Israel through a dedicated

team in Tel Aviv and a systematic coverage approach

Credit Suisse strives to be the number one bank for the Israeli high-tech communityWe have a strong commitment to the Israeli market with our dedicated high-tech team in Israel, our annual High-Tech Forum, and our high-tech community Israel website. We have helped several Israeli high-tech companies to raise capital, such as Secure Islands, Taboola and BorderFree.

Overall, in the last six years, we have raised 20 billion dollars of equity and debt financing and assisted M&A transactions worth 10 billion dollars involving Israeli companies, across different industries.

Furthermore, we are the number one Private Bank in Israel in 2014 and 2015 according to Euromoney.

2015 Euromoney Private Banking Survey Named Best private Bank in Israel Winner for the Second Consecutive Year

Take the next stepTo learn more, please get in touch with us at www.credit-suisse.com/hightech

Comments from other entrepreneurs

“We’ve been in contact with Credit Suisse since we were private and were working with them step by step from a very early stage. Credit Suisse has always been a great mentor and a great help to us.” Eyal Waldman, Co-Founder and CEO of Mellanox Technologies

“Credit Suisse delivered for us. We are very pleased on all fronts.” Adam Singolda, Founder and CEO of Taboola

“I had the chance to join Doron Averbuch, CEO, Credit Suisse in Israel on a trip to the Asian Investment Conference, and I’m thankful for every minute that I could spend with him.” Ziv Orr, Co-Founder, CallVU and winner of the 2014 Credit Suisse Pitching Ring Award

Selected success cases

BorderFree USD 92 mn Initial Public Offering Joint Bookrunner

March 2014

Secure Islands Venture Stage Investment Direct investment by CS NEXT

September 2014

Taboola USD 117 mn Private Placement Exclusive Private Placement Agent

February 2015




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This material has been prepared by the Private Banking & Wealth Management division of Credit Suisse (“Credit Suisse”) and not by Credit Suisse’s Research Department. It is not investment research or a research recommendation for regulatory purposes as it does not constitute substantive research or analysis. This material is provided for infor-mational and illustrative purposes and is intended for your use only. The information contained in this document has been provided as general market commentary only and does not constitute any form of regulated financial advice, legal, tax or other regulated financial service. It does not take into account the financial objectives, situations or needs of any persons, which are necessary considerations before making any investment decision. The information provided is not intended to provide a sufficient basis on which to make an investment decision and is not a personal recommendation or investment advice. It is intended only to provide observations and views of the said individual Asset Management personnel at the date of writing, regardless of the date on which the reader may receive or access the information. Observations and views of the individual Asset Management personnel may be different from, or inconsistent with, the observations and views of Credit Suisse analysts or other Credit Suisse Asset Management personnel and may change at any time without notice and with no obligation to update. To the extent that these materials contain statements about future performance, such statements are forward looking and subject to a number of risks and uncertainties. Information and opinions presented in this material have been obtained or derived from sources which in the opinion of Credit Suisse are reliable, but Credit Suisse makes no representation as to their accuracy or completeness. Credit Suisse accepts no liability for loss arising from the use of this material. Unless indicated to the contrary, all figures are unaudited. All valuations mentioned herein are subject to Credit Suisse valuation policies and procedures. It should be noted that historical performance indications and financial market scenarios are no reliable indicators of current or future performance.

Every investment involves risk and in volatile or uncertain market conditions, significant fluctuations in the value or return on that investment may occur. Investments in foreign securities or currencies involve additional risk as the foreign security or currency might lose value against the investor’s reference currency. Alternative investments products and investment strategies (e.g. Hedge Funds or Private Equity) may be complex and may carry a higher degree of risk. Such risks can arise from extensive use of short sales, derivatives and leverage. Furthermore, the minimum investment periods for such investments may be longer than traditional investment products. Alternative investment strategies (e.g. Hedge Funds) are intended only for investors who understand and accept the risks associated with investments in such products.

Copyright © 2015 Credit Suisse Group AG and/or its affiliated companies. All rights reserved.

CREDIT SUISSE AG P.O. Box 100CH-8070 Zurichcredit-suisse.com

http://www.credit-suisse.com

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