The Edge of TechTop 5 biggest M&As of Israeli companies in 2024
The Edge of Tech
Top 5 biggest M&As of Israeli companies in 2024
Run:ai, Priority Software, Resident, BioCatch, and WalkMe all had large exits this year when acquired by other companies
This year has seen some considerable M&As of Israeli companies as the country faces ongoing challenges in wartime. Here, we take a look at some of the biggest names and numbers that caught our interest so far in 2024
Run:ai - acquired by Nvidia
Sector: Software Development | Established: 2018 | Founders: Omri Geller and Ronen Dar | Price: $700 million
Nvidia has officially announced its intent to acquire AI infrastructure orchestration and management platform Run:ai. The value of the deal was not revealed, but is estimated at around $700 million.
The purchase of Run:ai is Nvidia’s biggest acquisition in Israel since purchasing Mellanox for $6.9 billion in March 2019. Since the acquisition, Nvidia’s local R&D center in Israel, which was first established in 2016, grew by about 100%, reaching 4,000 employees in the country. The Israeli R&D centers are headed by Amit Krig, SVP software and NIC Product line at Nvidia. In February 2022, Nvidia also announced the acquisition of the Tel Aviv-based startup Excelero, provider of high-performance software-defined storage.
Nvidia Israel includes dozens of product teams working on next-gen technologies in different fields: Networking, BlueField-DPU, CPU design and development, Autonomous Vehicles, AI-Based Cyber-Security, Video Streaming, AI & Machine Learning Research, and more. Run:ai raised $75 million in a Series C round in March 2022 led by Tiger Global Management and Insight Partners, who also led the previous Series B round. The round included the participation of additional existing investors, TLV Partners, and S Capital VC, bringing the total funding raised to date to $118 million.
Priority Software - acquired by Blackstone
Sector: Enterprise Software | Established: 1986 | Management: Sagive Greenspan | Price: $800 million valuation
Blackstone has announced that Blackstone Growth and affiliated funds have entered into an agreement to purchase a majority stake in Israeli enterprise software company Priority Software at an $800 million valuation, higher than initially reported by CTech this month. This marks the largest deal for the alternative asset manager in the country since it opened its offices in 2021. Priority Software offers mission-critical business applications and ERP solutions across a variety of industries, helping business management through cloud-based applications. Its product suite includes solutions for retail management, hospitality, and education, and is supported by a network of more than 100 partners worldwide.
The company has more than 17,000 customers and over 300,000 end users across multiple end markets as well as 500 employees located across five offices in Israel, the U.S., and Belgium. Blackstone is acquiring Priority from Israeli private equity fund Fortissimo (50%), managed by Yuval Cohen, and the American investment fund TA Associates. TA Associates acquired 50% from Fortissimo in 2020 at a company value of $250 million.
Resident - acquired by Ashly Home
Sector: Online matress seller | Established: 2016 | Founders: Ran Reske, Craig Schmeizer, Eric Hutchinson and Sharon Dagan | Price: $1 billion
Online mattress seller Resident has been sold for a billion dollars to the American furniture giant Ashley Home. Among the biggest beneficiaries of the transaction are Israeli founders Ran Reske, Craig Schmeizer, Eric Hutchinson and Sharon Dagan, along with a number of institutional entities from Israel, led by More Investment House, Phoenix, Menorah, and Psagot. Most of these entities invested in Resident during a $130 million fundraising round led by ION in 2021. At the time, the company was valued at approximately $700 million. Resident operates in the online furniture and mattress market, which is estimated to be worth $250 billion annually. The company primarily focuses on the mattress category in the U.S., which has an annual turnover of approximately $16.5 billion.
Recent estimates suggest that Resident concluded 2023 with revenues of $900 million and an operating profit margin before taxes and depreciation (EBITDA) of 10%. In 2018, it was recognized as the fastest-growing e-commerce company in the U.S. by "Internet Retailer," a magazine that ranks major online retailers in the country.
BioCatch - acquired by Permira
Sector: Fraud detection | Established: 2011 | Founders: Avi Turgeman and Benny Rosenbaum | Price: $750 million
Israeli fraud detection startup BioCatch is being acquired by Permira Growth Opportunities II, a fund advised by global private equity firm Permira. The firm, headed in Israel by senior adviser Ran Maidan, will pay around $750 million for 60% of BioCatch, giving it a valuation of $1.3 billion. Permira will primarily purchase shares from Bain Capital and Maverick Ventures, which bought their holdings in 2020 when the company was valued at approximately $300 million. Other shareholders, including venture capital funds Blumberg Capital and OurCrowd, have also received offers from Permira to sell their shares.
Permira, which has 80 billion euros in assets under management, raised a new growth fund of $4 billion at the end of 2021 to increase its presence in the technology world.BioCatch, which developed a system for fraud detection and financial crime prevention powered by behavioral biometric intelligence, has experienced accelerated growth in recent times. The company was established in 2011 by Avi Turgeman and the late Benny Rosenbaum, with Gadi Mazor taking over as CEO in 2018. At that time, revenues were $7 million and the company was valued at $100 million. In 2023, BioCatch ultimately finished with 49% ARR growth, whilst also surpassing the $100 million ARR milestone and attaining EBITDA profitability. Today, BioCatch counts more than 190 financial institutions as customers globally, including over 30 of the world's largest 100 global banks.
WalkMe - acquired by SAP
Sector: Enterprise software | Established: 2011 | Founders: Rafael Sweary and Dan Adika | Price: $1.5 billion
Enterprise software giant SAP is acquiring Israeli company WalkMe for $1.5 billion in an all-cash transaction. WalkMe was valued at less than $880 million on Tuesday, meaning the offer of $14 per share represents a 45% premium. The company went public on Nasdaq at a $2.5 billion valuation in June 2021, raising $286 million. This is SAP's 12th acquisition of an Israeli company.WalkMe, founded in 2011 by Rafael Sweary and Dan Adika, has developed a platform for adopting digital technologies without the need to write additional code. The concept behind WalkMe’s solution is to help organizations measure, promote, and act in order to maximize the impact of digital transformation processes, thereby improving the efficiency of the software the organization uses.
WalkMe underwent several rounds of layoffs last year, parting ways with 112 employees last April in addition to the 43 employees who were laid off at the beginning of 2023. The second round of layoffs totaled 10% of the company's employees.
WalkMe decided last year to reduce its activity with small and medium-sized businesses and double down on organizations that employ over 500 people.
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