Vertex Management Israel Venture Capital FundsJanuary 18, 2001
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The Vertex Group Manages over US$ 1B in 7 VC funds since 1983Offices in: Redwood City, CA SingaporeTel AvivLondon
Invested in over 245 companies of which 82 have exited via M&A or IPO on: NASDAQEASDAQ Neuer Markt Vertex Israel manages US$ 250M in 3 Israeli VC fundsTaipeiBeijingHong Kong Nouveau March Singapore Stock Exchange Taiwan Stock Exchange2
Focus on seed & early stage Israeli / Israeli-related Target investment transactions leadership Investment size of US$ 2M to US$ 5M and up to US$ 10M per company (in special cases upper limit is higher)Invest in companies that contribute to the growth of the Internet Economy and Information Networking:BitwaysCommunications Software & Enhanced ServicesInternet and E-commerce Applications Emerging IT Technologies
Investment Strategy - General3
Bitways: Intelligent networksBroadband networkingInternet appliancesCommunications Software & Enhanced Services: OSSSecurityEnhanced services enabling software platformsApplications: Content delivery networks Mobile-commerce enabling technologiesEmerging image and video distribution technologiesSpecial opportunities in core Information Technologies
Investment Strategy Portfolio Focus Broadband access (Cable, xDSL, fixed wireless) Photonics (components & systems) Voice & data convergence Streaming & Compression QoS and Traffic Management Peer to Peer distributed processing4
ExitsStatistics for the last 5 years in Israel :60-80% Mergers & Acquisitions (M&A) 20-40% Initial Public Offerings (IPO)5
M&A Activity in IsraelStatistics from Dolev&Abramovitch6
Sheet1
M&A Activity in Israel
YearNo of dealsAmts M$
19954168
19966633
19973543
1998112527
1999162812
2000*2511627
IPO & follow-on Offerings in Israeli Hi-Tech Companies
YearAggregate amounts raisedNo of IPOs
19951206
199655919
19971909
19984139
1999179716
2000*429026
Sheet2
Sheet3
MBD00059FBB.xls
IPO Activity in IsraelStatistics from Dolev&Abramovitch7
Sheet1
M&A Activity in Israel
YearNo of dealsAmts M$
19954168
19966633
19973543
1998112527
1999162812
2000*2511627
IPO & follow-on Offerings in Israeli Hi-Tech Companies
YearAgg Amts RaisedNo of IPOs
19951206
199655919
19971909
19984139
1999179716
2000*429026
Sheet2
Sheet3
MBD00059FBB.xls
Israeli Hi-Tech M&A and IPO Activity 1995-2000
Statistics from Dolev&Abramovitch8
YearNo of dealsAmount in $M199541681996663319973543199811252719991628122000*2511627
YearAggregate Amount RaisedNo. IPOs19951206199655919199719091998413919991797162000429026
M&AsAn M&A is a real alternativeM&A is not a default to IPOIn the long term, failure rate is high for both9
Factors for M&AsManagement difficultiesDistance from marketsAvailability of resourcesPolitical situation
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M&As- Best of Both Worlds The acquired company becomes the Israeli arm of this larger, established foreign company and enjoys the following benefits:Financial backingName recognitionMarket and distribution channels that would have been next to impossible to have achieved alone11
Best of Both Worlds contdIncreased employment in IsraelIncreased economic activity in Israel Increased opportunities for stakeholdersRevenues for shareholders
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M&AsStock or Cash?13
TelegateDevelops and markets MultiGate which enables CATV operators to offer telephone and data services over their HFC infrastructureCurrent customers in Belgium, Germany & Pacific Rim with an aggregate sales potential of US$ 150MECI and GI were strategic partners and shareholdersExit: Company sold to Terayon Inc. for US$ 400M
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Telegate Ltd. sold to TerayonDecember 1999100 employees$3M sales15
TradeumXML-based Software engine for hosted on-line exchanges Seed investmentCompany recruited a US-based management teamIn 8 months the company staff grew from 10 to 100 Exit: Company was sold to VerticalNet Inc. for US$ 478M16
Tradeum sold to VerticalNetApril 2000 60 employees (of 150 intl)$ 0 sales 1999
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MoreComInteractive TV infrastructure softwareThe President was a senior executive in GI and Philips in the Cable and HDTV businesses Strategic investments by Divicom/C-CubeInvested in seed & 2 follow-on investmentsExit: Company was sold to Liberate for US$ 561M
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Morecom sold to LiberateApril 200046 employees$100K revenues 199919
VisionTechDevelops and markets advanced MPEG-2 Coding VLSI components for PVR, DVR, PauseTV and Internet STBsHighest quality MPEG-2 encoding silicon realizationMajor design wins and customer signup with: WebTVAOL-TVGIExit: Company was sold to Broadcom Corp. Scientific Atlanta Haupauge Vestel ReplayTV Panasonic Fast20
VisionTech sold to BroadcomDecember 200037 employees$1.5M sales 1999
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Portfolio Companies
www.vertexisrael.co.il 1 HaShikma St. P.O.Box 89 Savyon 56530Israel
Tel: +972 3 535 7621 Fax: +972 3 535 7622
Mr. Yoram Oron, President [email protected] Dr. Gideon Shichman, VP [email protected]
Contact Information:
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