The torrent of high potential start-up businesses coming out of Israel, particularly in the technology sector, shows no sign of abating. Digital advertising agency Matomy Media Group, who are headquartered in Tel Aviv, are the latest to look at making a name for themselves on a global scale, with the announcement that they are planning an IPO on London’s FTSE Stock Exchange.
Despite its status as a start-up, the fast growth of Matomy means they already have established offices in 10 global locations. Several other Israeli businesses are believed to be close to settling on London as their listing location, with more IPO’s expected in 2014.
While this paints a positive picture of the Israeli economy and particularly the business and entrepreneurial culture that has developed there in recent years, it could also prove a cause for concern. Matomy, for example, are using their money to up their stake in a German based web design firm as well as to take control of a Mexican subsidiary. While Israeli companies are performing well, the lack of money coming directly into Israel because of these business activities is a worry.
Even private equity interest in these businesses often ends with operations being moved outside of the country, although in some cases a merger or buyout deal is reached and the capital then funds another start-up within Israel.
Telling the London Telegraph why they had chosen the city as the location for their IPO, Matomy Chief Executive Ofer Druker said, “I hope we will be the early bird showing the other birds where to land – I think that there are a lot of opportunities and a lot of great reasons to choose London. The UK is an early adopter of online technology and a lot of big companies operate from London. We saw that the local investment community appreciates this type of growth story”
IPO announcements often precede a flurry of private equity activities as due diligence is carried out to see if a firm would be open to or suitable for a buyout, although this has not yet happened in this case.