Go Israel: Out of 8 stories on Techcrunch's homepage, 5 are on Israel: AllofMe, SeeToo, Google Israel, eToro and SuTree

The front page at TechCrunch looks as if it was taken out of VC Cafe today. Out of 8 posts displayed on the home page, 4 are related to Israel. If you scroll back one page, you'll see another one - not bad for a tiny country in the middle east.


Here's a quick recap:

1. Yossi Vardi invests in Tel Aviv Based startup AllofMe - the Israeli company is developing a timeline generator for digital assets. It puts your emails photos, documents and videos on a time scale, thus allowing you to keep track of your media while giving it a new perspective. Next time some one asks you "what did you do on your birthday?" AllofMe should help you answer the question. Addy Feuerstein is the Founder - the company was founded in May of 2007 and has 8 employees. (via TechCruch, Haaretz, Orli)
   
   
2. Yet another investment by Yossi Vardi - this time it's an Israel/New York City based startup called SeeToo, a web-based application that allows individuals to invite friends and family to watch home videos with them in real time in a chat room. It's a bit similar to Meebo Rooms and soon-to-be-covered by VC Cafe, Ekko TV. TechCrunch is giving away 500 invites - try to get yours here. Yoav Ilan, head of marketing and biz dev gave the demo to TechCrunch. Yoav- Can I also get a demo and some invites? (via TechCrunch)
   
   
3. Google Israel acting Evil - According to Globes Online, Google initially stated that “disclosing the blogger’s identity violated rulings on the balance between freedom of expression and a person’s right to his reputation” - BUT Google finally caved in and provided the IP address of an "anonymous" blogger to an Israeli court voluntarily as part of a defamation case against a politician. Not that I support protecting a criminal, but it's important to note: G wasn't forced to give the data - they volunteered it. (via Globes, Techchrunch)
   
   
4. Roi Carthy posted an interesting review of eToro - a visual Forex (Foreign Exchange) Trading platform that simplifies trading by allowing users to trade money in a game-like setting. The parent company is Israel-based Tradonomi Ltd - It is incorporated in Limasol - most likely for taxing purposes, with offices in Tel Aviv. Trandonomi is led by Ceo and co-founder Jonathan (Yoni) Assia. was founded in 2006 and has 30 employees. Most recently, eToro released an affiliate platform called eToro Partners. (via PR Web, Techcrunch and Linked in).
   
   
5. Bonus: scroll one page back and see an article on Israel's SuTree, an online index and library for free video lessons, tutorials, lectures and how-to's from all over the web. SuTree got a serious facelift and a content collaboration agreement with Israel based 5min.

On a related note, If you haven't done so already, please visit the new 'under construction' home of The Venture Capital Cafe at http://www.vccafe.com and subscribe to my feed. VC Cafe covers early stage companies, innovative technologies, and venture capital news with a spotlight on Israel. There's a bunch of new features and ideas on the way in December, as the VC Cafe celebrates two years!

VC Cafe is Moving

I'm testing a new blogging platform for venture capital cafe at www.vccafe.com. It is still work in progress, but don't expect to see an image of a construction worker when you visit the site. All the posts were successfully migrated and I'm now in the process of tweaking and customizing everything from logo to layout. Many thanks to all who collaborated with me on this effort.

Feedback, ideas and suggestions are welcome. Drop me a comment or shoot me an email if you had the chance to check the new site out.

Read It On VC Cafe First: Six Israeli Startup News That You Probably Missed This Week

It's earnings season and it's hard to keep up with all that's been going on with Israeli companies this week. Want to catch up with the latest news? Below is a bite-size summary of the latest VC and start up news from the holy land.

1. eSnips, an Israel-based "social content-sharing site" released 'Social DNA'. Social DNA is a series of quick 'tests' that allow users to find like minded people. The concept is not new as it is implemented by many dating sites and Facebook Apps such as: compare people , similar friends and many online dating sites. eSnips' CEO Yael Elish reported to have approximately 13 million monthly users, out of which 200K are Israelis [Sources: Techcrunch, The Marker]
   
   
2. New VC Fund focused on India-Israel investments. Footrpint’s focus is to invest $2-4 million in lifestyle, retail, financial services, security, education, clean technology and life sciences companies in the India-Israel-India corridor. Footprint is led by Neill Brownstein, co-founder of Bessemer Venture Partners, as well as Linda Brownstein, Josh Bornstein and Shalini Elassery. Footprint already signed an agreement in July 2006 with Infinity—an Israeli-Chinese technology fund with $350 million in its current fund—to invest in Israeli companies and technologies that target Indian markets. [via LiveMint and VC Circle]
   
   
3. Electric Cars in Israel? Following Shai Agassi's and Idan Ofer's "Project Better Place", Israel is attracting foreign investments related to electric cars. French car maker Renault SA is studying a possible plan to build a manufacturing plant for electric cars in Israel. [via Businessweek]
   
   
4. JaJah loves Jangl - Israeli VOIP Platform JaJah recently announced a series of new deals. It started with an ad for minutes campaign, enabled by a partnership with Oridian (also Israeli). The geographically targeted ads allow JaJah to monetize while providing a free service to its users. Now, JaJah announced a partnership with Jangl, a VOIP platform that enables users to get a virtual telephone number on the web. Jangl will help JaJah to extend its reach to Jangl's 40M users and Jangl will in turn use JaJah's monetization platform and gain entry to the 122 countries in which JaJah is active. [via Mashable]
   
   
5. Video discovery made simple - Israel based Taboola wants to enable content discovery style 'Stumble Upon' for video sites. EverGreen believes in the idea - it will finance a round of $1.5M to make it happen. Taboola allows users to integrate ads onto a site's video player using java script tags. Israeli 5min.com has been testing the service and it reported a 23% increase in watched videos and 53% increase in session length since it started the test. [via NewTeeVee]
   

See an example of Taboola (click on related, bottom left):

• Ukraine planning to create free trade zone with Israel. Among the priorities of Ukraine's development the president identified the development of industry, specifically machine building, space- and aircraft construction, and chemical industry. [via]

Spread The Word: The Israel Web Tour Returns To California

Back by popular demand - The IsraelWebTour (IWT) has begun taking applications, so before we continue - If you are an Israeli entrepreneur with a startup in any stage, The tour is the ultimate platform for visibility, exposure and fast track access to Silicon Valley’s internet landscape. The deadline for applying companies is December 3rd at 5pm PST- file your application here. To stay updated with the the latest news from the tour, join the facebook group or read the IsraelWebTour Blog.

What is the IsraeliWebTour?
IWT is organized by the California Israel Chamber of Commerce (CICC), led by Shuly Galili, whom I recently met in the NewTeeVee Live conference in San Francisco. In addition to the business opportunities that spurge from the tour, it has an educational element designed to expose Israeli entrepreneurs to the latest go-to market strategies and product feedback from the local experts.

Agenda
The tour starts as a contest. Operating Israeli start ups and aspiring entrepreneurs submit an application to be chosen to the tour. The fifteen lucky CEOs chosen to participate in the tour by the conference organizers and steering committee, will be flown to the US, to represent their startups in Silicon Valley in exclusive meetings with the Valley's hot startups, VC's and potential partners.

During the week long tour, the startups will meet with execs from Google, Yahoo, EBay, Adobe and more in addition to the private one-on-one meetings with potential investors. Last year, some of the issues covered by industry leaders included:Online Marketing, Raising Funds on Sand Hill Road, Building a Winning Business Model, Web2.0 Development Platforms and so on. The tour's highlight is a Public Showcase, on February 5th, where each startup will have the chance to debut its products to members of the press and potential investors. The Tour will end with a closing night party in San Francisco on Thursday February 7th.

Last Year's Achivements
The IsraelWebTour is a unique opportunity for any startup in an emerging market.

• Five of the 15 companies who participated in 2006 IsraelWebTour raised venture funds from US and Israeli VCs.
  
• Two companies were acquired. Most recently Yedda was sold to AOL.
• Four companies have launched their US operations within 9 months of last year's tour.

Testimonials:

"The Israel Web Tour had a great impact on Fixya’s ability to receive funding, form strategic partnerships with the biggest companies in the industry, and jump-start the process of positioning itself as a leader in its space."
Yaniv Bensadon, CEO, Fixya

"The Israel Web Tour is an excellent, well organized and orchestrated initiative; it exceeded my expectation and provided ample opportunities for networking with top players in the Silicon Valley and exposed us to new business opportunities. This helped us to accelerate our success and contributed to expand our growing affiliate and partnership network. Well done !"
Avichai Nissenbaum, CEO, Yedda

Sponsorship Opportunities - Only $7000:

Opportunities are now available to sponsor the IsraelWebTour 2008. Please contact Shuly Galili, Executive Director, The California Israel Chamber of Commerce. shuly@ca-israelchamber.org, 408-343-0917. Application to the tour can be found here.

Comability Raises $6M To Develop A Back Office Management System

ComAbility Ltd has announced a $6 million round raised by Vertex Venture Capital and PE fund Stata Venture Partners.

What is Comability?
Comability developed a subscriber management system for Next Generation Networks (NGN). According to its website, ComAbility's software platform bridges the gap created by the rapid growth of Broadband and Wireless Data Communication Services, due to the increased demand for personalized services, versus the service providers' Operation Support Systems (OSS) infrastructure. Now in plain English, Comability provides the backbone for Broadband Internet, cellular and WiFi providers in a cheaper and more flexible way than other players in the market.

Financing Rounds
The current round was Comability's first, even though it has been around since 2004. Unlike other early stage start ups, Comability has a working product, initial revenue and something that most start ups dream of - it is even profitable.

Existing clients include DSL, cellular and WiFi providers in Israel and abroad. Comability plans to utilize the financing round to grow internationally and develop an additional line of products.

Team
Comability is managed by former VC Alon Fishman and co-founder and CTO Doron Givoni.
With a headcount of 15, Comability is based in Herzliya Israel.
[via]

Yedda Means Knowledge (in Hebrew), And Knowledge Means Cash (for Yedda)

AOL completed another acquisition of an Israeli start up. It started in 1998, when ICQ was sold for $406M, continued a week ago with the Quigo M&A for $340M, and it is now the turn of Israel-based Yedda, a semantic Q&A platform that was sold for an undisclosed amount (estimates say it's in the double digit millions). According to the deal terms, Yedda will be a wholly owned subsidiary of AOL and It’s R&D office will remain in Israel.

With only 20 employees and an a seed investment of $2.5M (raised on March 2007, from Genesis Partners and angel investors), Yedda managed to succeed where Google failed. Yedda developed a semantic Q&A service that uses patent pending technology. The engine automatically matches user questions to other related questions and topics, while finding the best available users to answer the questions based on their profile data and previous activity. As a result, users can establish their status as 'experts' on a given topic.

According to the release from AOL, the acquisition was primarily focused on Yedda's patent pending technology and not its user base: Comscore shows a big jump in usage since the summer, from 215,000 unique users in June to nearly 800,000 last month. It's worth to mention that 90% of the traffic goes to Yedda through biz dev deals to power Q&A services on other sites. Their largest partners are ePals and TheJobNetwork (via).

Yedda-powered features and widgets are set to begin appearing on AOL's sites over the next few months - it will be interesting to see how AOL leverages this deal.Some of the existing widgets include the frequently asked question, Ask a question and My profile. See example:


Questions on Yedda range from practical to not-safe for work type of questions. For example: I'm searching for copy of 1968 Italian film, Colpo di Sole (1968). How should I look? or Who found Melinda England's racy MySpace pictures? How did this story make it to the headlines?

Yedda was founded in October of 2005 by CEO Avichay Nissenbaum and CTO Yaniv Golan, who I met earlier this year in the Web 2.0 Expo in San Francisco.

Daylight Savings: XJet first round, Octavian second round, Petrobras Shopping, Jordan Valley Semiconductors and Q3 Summary

Catching up with some of the recent deals in the industry. Below is a short recap of what's been getting money these days:

1. Octavian Inc, a leading provider of Separately Managed Account (SMA) solutions in the Wealth and Investment Management (WIM) industry, announced the completion of a $10 million, second round of investment led by Vertex Venture Capital, together with Carmel Ventures and Gemini Israel Funds, Octavian's existing investors. [via]
   
   
   
2. Solar energy start-up XJet raises $9m. In stealth mode, XJet aims to redefine solar cells cost efficiency by using next generation deposition technologies. Following Shai Agassi's "Project Better Place", this investment strengthens Israel's position as a world leader in the export of renewable technology. [via]
   
   
3. Staying on energy, Globes reports that Brazilian energy giant Petroleo Brasileiro SA (Petrobras), the fifth largest oil refiner in the world, is examining Israeli cleantech for possible investment at the International Water Technologies and Environmental Control Exhibition and Conference - Watec 2007 in Tel Aviv.The sources added that the company will invest $112 billion in technology companies worldwide under its five-year plan. The bulk of this investment will go to renewable energy technologies, including $15 billion for biofuel. [via]
   
   
4. Intel invests $11M in Jordan Valley Semiconductors. The 12-year-old Jordan Valley develops tools for semiconductor metrology based on x-ray technology, with offices in Israel, U.S., Europe, and Asia. Intel's investment follows a funding spree of $31M since May, including Israel-based application management software company Aternity and Israel-based portable computing environment company Ceedo and Israeli-founded IP Phone provider, JaJah. [via]
   
   
   
   
5. VC Investments in Israel in Q3 up 9% compared to equivalent period last year. In the third quarter of 2007, 108 Israeli high-tech companies raised $414 million from venture investors – both local and foreign. The average company financing round was $3.83 million in Q3, compared with $4.38 million in the third quarter of 2006. [via]
   
   

Quigo Brings Home the Bacon, 5min for $5M, TransChip Makes an Exit, Refresh 07

The man who reads nothing at all is better educated than the man who reads nothing but newspapers.

Thomas Jefferson (1743 - 1826)

1. AOL buys Quigo for $340M. Yaron Galai and Oded Itzhak (featured on VC Cafe in the past) are probably happy to be part of AOL's web advertising network. The deal adds about 100 employees to Time Warner's AOL, and follows a series of acquisitions in the ad space including: ad network Advertising.com; Tacoda, which targets users based on their habits; wireless ad network Third Screen Media; video ads company Lightningcast; and ADTECH, a global ad-serving company. Is more Israeli M&A to follow? [via AP]
   
   
2. Life VideoPedia 5min, a 'how to' video sharing site, (previously covered here) raised a $5M round from Spark Capital. This round follows a pretty major dilution for the founders, following 5min's initial angel round of $300K. Get a taste of the competition at Graspr.com. [via Techcrunch]
   
   
3. Samsung Electronics made their first acquisition in ten years - Samsung paid $70M for none other than TransChip Israel Ltd (Tanschip's old URL links to Samsung). Samsung spokeswoman Lee Eun-hee said TransChip would be renamed Samsung Semiconductor Israel R&D Center Ltd. and will become the Korean company’s 17th research and development centers around the world. [via IsraelPlug]
   
   
   
4. Refresh07 - IDC research has teamed up with Gemini Israel and Genesis Partners to throw the Refresh07, the 'new media' conference. It is taking place in Tel Aviv, Israel on November 21st. The conference will deal with the evolving business models online, their impact on distribution channels and traditional media and content value/ monetization. See the conference page and the Refresh07 Facebook group. [via Israel VC on SandHill Road]
   

Israeli PE Fund EMB Looking to Invest in Mobile Content

Eilon Agam, former VP of content at Israeli telecom giant Pele-Phone, gathered a group of private investors to start a new PE fund, EMB Capital Ltd.

EMB is planning to be a private equity fund that focuses on internet and cellular content services. The fund will invest primarily in new content companies and ventures, as well as existing companies seeking to expand their activity in Israel and overseas.

Globes interviewed Agam, who said that the new fund will not operate as a venture capital fund but as an investment fund with a more flexible structure - To me it sounds strikingly similar to Afterdox, the angel investment group formed by Amdocs executives (covered on VC Cafe before).

EMB didn't raise any capital yet. It is focused on finding the right target investments and allocating the funds accordingly. Investment are capped at $1 million each, Agam predicts three or four investments a year.

EMB does not plan to exceed the $1M investment, which will pose a real challenge founding more matured companies. To answer Globes' question, Agam replied:

"When the companies need more capital we'll find an investor group that can invest larger sums in them."

EMB Capital has begun reviewing a number of potential investment projects, including Internet and cellular content ventures, as well as mobile virtual network operators and WiMAX technologies. "Israel is without doubt an ideal melting pot for the development of new content services. We'll take the companies overseas afterwards." Agam added.

Science Fiction? ClassifEye's Biometric Authentication for Cell Phones

If you're familiar with the latest James Bond movies, this product will sound as if it came out of the MI6 laboratories.

As the mobile phone converges with our email, address book, password manager, photo album and countless more services, it is becoming a lucrative identity theft target. Various companies developed fingerprint and voice authentication technologies to solve it, but biometric solutions were typically expensive and hard to implement, as they often require expensive hardware such as fingerprint sensors, USB keys and code generators to operate.

Not anymore. With an aim on security, Israel based ClassifEye developed new fingerprint authentication technology that can be installed on any mobile phone with a camera, eliminating the need for additional hardware and therefore reducing costs and accelerating distribution.

How does it work?


In essence, ClassifEye developed a software-only solution - no biometric sensors and no extra hardware. Basically, the user installs a simple download and goes through a short setup process. During the setup, ClassifEye leverages existing technology by taking a picture of the user's fingerprint using the phone's camera. The software then authenticates the user's fingerprint and authorizes immediate access. The authentication takes about a minute to complete. If you want to learn more, see the patents filed by the CEO.

Who is the target market for this?

Not everyone needs biometric protection, so ClassifEye caters to a few niche segments.

1. Phone carriers - their pitch: as voip becomes more mature, operators need to increase the average revenue per user (arpu). ClassifEye would be an additional revenue stream to mobile operators.
2. Financial institutions - think about it, instead of getting asked by an operator the long list of authentication questions (what's your social security, address, pin, etc) - credit card companies would just know that it's you.
3. Mobile Commerce Vendors - ClassifEye's pitch:

   The most prominent mobile commerce initiative to date has been the m-Wallet initiative. Using the Sony Felica (RFID) chip, NTT Docomo pioneered the m-Wallet initiative in the Far East and numerous successful pilots have now been run in Europe and the U.S. Implementation of such initiatives as the m-Wallet and others requires the full trust of consumers. ClassifEye offers greater trust to consumers, which will encourage them to load to their phones with larger amounts of money via ATM’s and make frequent macro-transactions.

Also on their radar: Healthcare, Government and Homeland Security agencies.

Barriers of Entry

The meteoric progress in mobile technology makes it easier for ClassifEye to penetrate the market. In Japan, for example, mobile phone technology has developed to the extent that people often use them to make small payments, instead of credit cards. This makes the need for security even greater.

According to ClassifEye's CEO, a year ago there were only a couple of phones that met the requirements for their product - now there are approximately 39 models that do.
Some of the mobile devices containing fingerprint scanning for authentication include: CECT S10, Qiao Xing Mobile (CECT), Atrua ATW300, Toshiba Satellite RG4-E02 Pocket PC (FCC), ViewSonic's V38r-01, V38r-02 & V38r-02A, Advance Tech, Hitachi W51H, Fujitsu F1100 and many more.

The leading competitor is fingerprint authentication provider Authentec - a company that is "stamping out lots of growth" (motley fool).

About

ClassifEye was co-founded in December 2003 by CEO Rami Cohen, who previously founded Verifox, a developer of credential interoperability technology for the financial industry and CTO Asher Peretz, who previously founded PictureVision Inc that was subsequently sold to Kodak in 2000.

ClassifEye raised $1.2M from Nobska Ventures, a Baltimore, MD based venture capital firm. Based in Jerusalem, the company has a head count of 12. Want to contact ClassifEye? Leave a comment below.

[via]