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Economic News from Israel

  • Herzliya Pituach-based MyCheck has received an investment of $1.7 million by Israeli supermodel Bar Refaeli along with the Saban, Wertheimer and Elroi families.  The company is a developer of a payment application for bars and restaurants that enables customers to see their bills throughout the evening while enjoying the freedom of leaving the minute they go.  The company is a member of AICC.
  • Savannah, Georgia-based Gulfstream Aerospace and Israel Aerospace Industries have been awarded the US FAA’s and Israel Civil Aviation Authority’s certification of air worthiness in their G280 executive jet joint venture.  This new executive aircraft has a range of 3,600 nautical miles, and can fly non-stop from New York to London comfortably carrying 10 passengers.
  • Haifa-based Sol Chip has raised $1 million, half from Israel Electric Corporation and the rest from a New York-based investment bank and private investors.  A portfolio company of The Trendlines Group’s Mofet Venture Accelerator, the company is developing solar energy systems for electronic and mobile devices, and participated in The Trendlines Group’s US road show and presented to Atlanta investors last March.
  • Caterpillar has agreed in principle to provide $20 million in financing for Even Yehuda-based Blue Sphere to build two projects in the United States for the generation of electricity from organic waste.  As a condition for the financing, Blue Sphere has already signed multi-year power purchasing agreements for the two projects with local utilities.  Caterpillar recently announced a major manufacturing project in Athens, Georgia.
  • Herzliya-based Pitango Venture Capital has raised an initial $150 million for its sixth fund that will invest in early-stage Israeli companies including seed and pre-seed investments as well as later-stage companies in a variety of industries including Internet & Media, Mobile Apps, Data Storage, Enterprise Computing, Telecommunications Infrastructures, Software, Semi-Conductors, Renewable Energy, and Life Sciences.  The firm now manages over $1.4 billion, and has invested in 106 Israeli high tech companies to date.
  • Tel Aviv-based SodaStream has launched expanded operations in Israel that will include NIS 4 million in brand development and new flavored capsules, using Israel as the first test market.  The company had one of the most successful IPOs on Wall Street in recent years.
  • Sequoia Capital is set to complete raising a new $200 million venture capital fund for Israeli investments that will focus on early stage information technology start-ups.  The new Israeli fund is one of three being raised by Sequoia, with the other two focused on the US and China.
  • Haifa-based Pluristem Therapeutics is initiating Phase II clinical tests in the United States to evaluate the safety and efficacy of its placental expanded cells in the treatment of peripheral artery disease.  Dr. Manesh Patel of Duke University Medical Center in North Carolina is the study’s lead principal investigator.
  • Tel Aviv-based Verint Systems will acquire its parent company, Comverse Technology, after the latter closes the previously announced sale of its telecom business, Starhome BV and the spinning off of its core business Comverse Inc.  Verint maintains a large office in Atlanta for its CRM Solutions Group.
  • Microsoft has completed the establishment of its Israeli Innovation Center, one of 31 Microsoft Technology Centers worldwide. It is based at Microsoft Israel Ltd.’s premises in Ra’anana, Atlanta’s Sister City in Israel. The Center will serve mainly for the building and sale of IT infrastructure products, and function as a place where company representatives spend several days in developing customized solutions with Microsoft staff.
  • According to a survey by Deloitte Brightman Almagor Zohar, 59% of Israeli venture capitalists expect 6-10 exits of at least $25 million each by Israeli start-ups over the next six months, while 41% predict up to five exits.  64% of respondents believe that the economic situation will remain unchanged over the next six months compared to a third who believe it will worsen, and the rest who believe it will improve.
  • Israel’s GDP rose by an annualized 3.2% in the second quarter, far above the analyst’s forecast of 2.5% growth according to the Central Bureau of Statistics.  The growth rate was higher than the annualized 2.8% growth in the first quarter and 3.1% growth in the fourth quarter of 2011.
  • Israel’s population nears 8 million with 7,933,200 residents on eve of Rosh Hashana, the Jewish New Year.  5,978,600 are Jews (75.4% of the total population), 1,636,600 are Arabs (including Bedouin and Druze) (20.5%), and 318,000 are categorized as “others” (mostly non-Jews who have one Jewish grandparent, and are entitled to Israeli citizenship under the Law of Return).  The rate of growth was 1.8% in 2011, similar to the rate over the previous eight years.
  • Hebrew University, Technion, and Weizmann Institute made the list of the World’s 100 Top Universities, the first time that more than one Israeli university has made the list.  Most of the top 20 are in the US and the UK.
  • According to media reports, gas exploration companies Noble Energy, Delek Group, and others have discovered enough natural gas in Israel to supply the country’s domestic needs for the next 150 years.  The gas could be worth some $240 billion, equal to Israel’s annual economic output.
  • The numbers of Israelis emigrating from the country is at an historic low with only 15,600 moving away in 2010, the lowest level of emigration in the past 40 years according to the Central Bureau of Statistics.  The data also shows that over the past three years, a record high number of immigrants had been returning to Israel, largely due to severe economic crises in Europe and the United States.
  • Israel has the highest Internet penetration rate for any country in Europe, the Middle East, and Africa according to a media and entertainment report published by PwC.  The 2011 rate was 95%, and is expected to rise to 96.4% and then to 98.7% by 2016.
  • Israel is one of the world’s top arms exporters, and most of its customers are developing countries.  Israel is also one of the world’s biggest arms buyers according to a report by the Congressional Research Service at the Library of Congress.  From 2004-11, Israel signed arms transfer agreements worth $12.9 billion, putting it eighth among the world’s eleven biggest arms suppliers, behind the US, Russia, France, the UK, Germany, China, and Italy.
  • Spending on education in Israel rose 5.8% in 2011 in real terms over 2010, and followed the 5.6% increase over 2009, according to a recent report in Globes.  80% of the national expenditures were financed by the government, local authorities, and government non-profit organizations with households paying the rest.
  • Despite a 3-year high in lay-offs in July following steady increases in lay-offs the previous months, Israel’s unemployment rate fell to 6.5% from 7.1% in June and 7% in the second quarter according to the Central Bureau of Statistics.  Participation of the labor force also rose slightly for the month.

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