Everyone wins when a big company acquires a start-up.From GlobsExactly three years ago, Google Inc. (Nasdaq: GOOG) co-founder Larry Page again took over as CEO, ten years after leaving the position. Eric Schmidt vacated the post to become chairman, and Page began to take the search giant in a new direction. Schmidt, who had been parachuted into the company in 2001 because of investor pressure as a responsible adult to turn the small and bubbling start-up into the corporate giant that Google has become. However, three years ago, it was decided to go back to basics, and not just with a personnel change, in order to give Google the feel and atmosphere of a start-up that it had lost over the years. The idea was to instill innovation, agility, and a faster pace of decision-making in a company with tens of thousands of employees.This was only part of Google's strategy to feel younger and more innovative. In fact, the company is one of the most active buyers of start-ups and technology companies, with over 150 acquisitions amounting to billions of dollars. This method has brought many new faces to Google's departments, and kept its head above the water in a range of fields.Google is not alone of course. Many enterprises in Israel and other countries are trying to bring in innovation through the back door. However big and smart they may be, these enterprises know that not all wisdom is found in the company's corridors, and that there is a need for some smarts and new thinking from outside, either through acquisitions, or more efficiently and smartly through strategic collaborations.Examples are Qualcomm Corporation (Nasdaq: QCOM) and Deutsche Telekom AG (XETRA: DTE). The two giants have shown great interest in tiny Ness Ziona-based Magisto Ltd. and have embraced it. The Israeli company has developed an advanced app for editing video clips directly from smartphones. The app is installed in hundreds of thousands of Deutsche Telekom handsets and the company works closely with Qualcomm on future developments."Video is one of the key elements in 4G networks, which are far faster than their predecessors. We consume as much as Facebook or WhatsApp in almost the same way, but Deutsche Telekom sought the extra something to offer its users, and provide this with our video editing service," says Magisto co-founder and CEO Oren Boiman.Boiman says that the collaboration with Qualcomm put it in the lead. "All of Magisto's technology and the set of products that we're developing are not part of Qualcomm's repertoire," he says. "They know how to make high-speed cameras, but we bring the product that is supposed to be the killer app, which can differentiate between what it sees through the camera, how to take automatic pictures, track the person in front of the camera, and so on."The advantage of big enterprises cooperating with start-ups is the added value and differentiation for their users when the need to answer the question whether our product causes their product to be better and different from other products. They know that they can't do everything in-house."In Israel, too, the same feeling that the lack of innovation can be solved by linking up with start-ups is also understood. For example,Zap Group Ltd. linked up with several Israel start-ups to offer added value to its advertiser clients. Zap Group CEO Nir Lempert says, "Assimilating a start-up in a big company can give it many advantages, such as a system-wide perspective, relevant ties in Israel and other countries, and help solve relevant business problems from life and not just in theory."Lempert says that the company's cooperation model with start-ups allows them use the large enterprises as a kind of beta site for various experiences and to see how things work in practice, and to change direction, if necessary. "We can install the product on our websites and apps and together try and promote the finished product in the world," he says.Lempert says that two successful examples are MobeeArt Ltd., which began as a company for building mobile sites for small businesses, and now develops systems for managing a full digital presence for these companies, and Vcita Ltd., which began as a diary management solution for free professionals, and with the influence of Zap Group developed the product to manage leads for small businesses."The change and development was made at our demand and needs, and these products are now sold in a number of countries. These transactions are win-win for both sides," says Lampert.Who will win smartup2?"Globes", in collaboration with Bank Hapoalim (TASE: POLI) is launching the second annual SmartUp competition for Israeli start-ups. As part of the project, "Globes" correspondents will track three start-ups, which receive assistance from incubator experts and Bank Hapoalim advisers, based on the understanding that many companies with good groundbreaking ideas get stuck at the start because of difficulties that prevent them from achieving their potential.The project is designed for Israeli companies that have raised at least NIS 250,000 in seed funding. Each company selected for the program will receive over three months advice from the high tech and business world on a range of topics relevant for early-stage start-ups, such as marketing, financing, human resources, and heading overseas. All they have to do is to register at smartup2 page (in Hebrew), and tell us why your start-up should participate. Participating companies will receive a start-up package from Bank Hapoalim, including a high-tech account at preferred terms and a NIS 20,000 grant.The three winners will receive assistance from leading Israeli incubators and accelerators Explore.Dream.Discover, 8200 EISP, andNielsen Innovate.Published by Globes [online], Israel business news - www.globes-online.com - on May 21, 2014© Copyright of Globes Publisher Itonut (1983) Ltd. 2014Globes - Everyone wins when a big company acquires a start-up   

The Israel Venture Capital (IVC) Research Center announced that Israeli high-tech firms were able to rake in US $493 million in venture capital during the second quarter. The figure is up by 4% compared with the first quarter's financing.It was further revealed that the amount accumulated for the second quarter was 3% higher than the funds raised during the same period in 2012. IVC made this accounting together with KPMG, an Israeli office of consultancy."The uptick in investments in the second quarter reflected in part relatively robust activity in the medical devices segment," said a partner at KPMG's technology group Ofer Sela."Yet, more than two years after the launch of the Israeli government initiative to promote investments in the life sciences, the sector as a whole is still not showing the expected results," Sela added.High-tech companies in Israel have been regarded as key drivers of the country's economy. It has prompted growth of up to 3.2% last year.

Official: Israel has technological solution to the Russian made S-300 air defense system, which may be sold soon to Syria.srael sold some $7.5 billion in defense products in 2012 – a record high – the Defense Ministry revealed on Tuesday, but officials voiced concerns that the coming year could see a slump in sales.Speaking to reporters at the Defense Ministry in Tel Aviv, Brig.-Gen. (res.) Shmaya Avieli, director of Defense Export and Defense Cooperation (known by its Hebrew acronym, “Sibat”), pointed to an ongoing economic downturn as one factor for decreased projected sales.He added that with the conflicts in Afghanistan and Iraq coming to a close, decreased demand for military products by coalition members will have a significant impact on the global defense industry. Additionally, Europe has a stated policy of preferring its own defense suppliers.“Israel is in the top 10 defense exporters in the world, if not the top five,” Avieli said. According to figures he unveiled, 25 percent of Israeli defense exports involve air defense systems, while sales of satellite platforms and radars collectively made up 24% of the revenue.Defense exports constitute 10% of Israel’s total industrial exports, not including diamonds, and 75% of Israeli defense manufacturing is slated for export to foreign markets. Although there are fears of a drop, Avieli said he did not expect 2013 to fall short of defense sales in 2011, which recorded some $5.8b. of exports.The most lucrative market, Avieli said, was the Asia and Pacific region, where states are preoccupied with building up their militaries, and where $4b. of Israeli defense products were purchased in 2012.Israel recorded $1.64b. of defense sales to Europe, while US purchases totaled some $1.2b.As a result of the decision to shut down an IAF squadron due to cuts in the defense budget, Israel has recently placed F-16 fighter jets on sale. The Iron Dome anti-rocket system is also on offer to foreign clients.“Investment in defense research and development not only produces returns for Israel’s security and the IDF’s strength, but also provides a high economic yield, to the benefit of the Israeli market,” Avieli said. “All of the credit goes to the industries, to the Israeli mind, and to the good ties Israel has with many states in the world.”Brig.-Gen. Eitan Eshel, head of research and development for the Defense Ministry’s Administration for the Development of Weapons and Technological Infrastructure (known as “Mapat“), said the IDF had access to technological solutions – both operational and under development – to the threat posed by the Russian S-300 air defense system. Moscow has vowed to complete the sale of the system to Damascus, which would threaten IAF activities in the region.Eshel added that the US is weighing the purchase of Rafael Advanced Defense System’s Trophy tank protection platform, which offers 360- degree defense against incoming threats and was first used operationally in 2011 by an IDF tank crew near Gaza. The US is testing Trophy out on its Ground Combat Vehicle, an armored infantry platform under development. Trophy “also identifies the source of fire and enables the tank’s weapon systems to quickly take aim at the source,” Eshel said.Israel Aerospace Industries’ subsidiary Elta Systems produces early warning and control planes; the US is the only other nation to offer such aircraft. Rafael’s SPICE guided missile system is being sold “around the world,” Eshel said. He added that Israel is second only to the US in drone production, noting the dozens of Israeli drone models on sale.He also mentioned robotic warfare, including autonomous armored vehicles and small robots for counter-terrorism missions, as a breakthrough Israeli specialty.