Last updated April 4th 2017
Israeli company Mobileye made history twice in the past three years: it went public in 2014, marking the largest Israeli IPO (initial public offering) in the US; and earlier this week, it was sold to giant chip maker Intel for a whopping $15.3 billion – the largest acquisition deal in Israel’s history, far surpassing Warren Buffett’s $6 billion acquisition of Iscar in 2006.
A developer of cutting-edge autonomous driving technologies – including pedestrian detection, collision warning systems, and others – Mobileye is now considered the leader in advanced driver assistance systems aimed to prevent road collisions.
A Jerusalem-based company that was founded in 1999 by Prof. Amnon Shashua, a researcher at the Hebrew University, and entrepreneur Ziv Aviram, Mobileye has already partnered with several leading auto makers. General Motors and Volvo, for example, are already offering the Mobileye system as a standard option in their new cars. The company also partnered with prominent car makers BMW and Volkswagen to manufacture the driverless cars of the future.
Despite one fatal crash of a self-driving Tesla car equipped with Mobileye’s autopilot technologies in June 2016, and a subsequent end to their partnership, Mobileye moved forward in full force.
71 million self-driving cars on the roads by 2030
Last summer, in what can now be viewed as somewhat of a telltale sign, Intel and Mobileye, along with BMW, announced they would be co-developing autonomous vehicles for the consumer market.
According to a recent report by research firm Berg Insight, 71 million self-driving cars are expected to hit the road by 2030. That’s a huge market for Mobileye, and now for its suitor – Intel. In other words, Mobileye’s potential is worth much more than its current market cap on NASDAQ ($13.5 billion, after Monday’s 30 percent share price jump) and even its acquisition price, $15.3 billion.
One-stop-shop for self-driving technologies
According to Berg Insight analyst Ludvig Barrehag, “the advent of autonomous cars is expected to have a tremendous impact on our society in several ways… The economic benefits are vast – the challenge is to succeed in making self-driving cars sufficiently reliable at a reasonable cost to enable commercialization.”
And that’s where Mobileye and Intel come in. Mobileye’s computer vision expertise, combined with Intel’s high-performance computing and connectivity expertise, could produce supreme automated driving solutions. The combined global autonomous driving organization, which will consist of Mobileye and Intel’s Automated Driving Group, will be headquartered in Israel and led by Prof. Amnon Shashua, Mobileye’s Co-Founder, Chairman and CTO.
“All the hottest technologies are developed in Israel”
According to Intel Israel‘s spokesman Guy Grimland, “Intel’s advanced computer chips are developed and manufactured in Israel; we also develop ultra-fast internet locally; our virtual reality revolution is happening here. And now, the autonomous car revolution will also take place here. The fact that all the hottest technologies are developed in Israel is a testament to Intel’s enormous appreciation of its Israeli branch. This makes me proud.”
Intel employs some 10,000 people locally, in manufacturing, research and development, and more. It’s one of the largest exporting companies in the Startup Nation.
According to Uzi Scheffer, General Manager of SOSA, which connects Israeli innovation to international corporations, Intel’s “historic purchase of an Israeli tech company… is further proof that forward-thinking corporations are willing to invest the money and resources needed when they find the right innovative technologies. After years of hard work, Mobileye is showing that staying the course and making the right connections are key to obtaining success.”
The success of the founders will now trickle down to Mobileye’s employees (many of who hold stock options), and even to Israeli citizens, through taxes. While the founders and employees are expected to earn billions from Monday’s acquisition, the State of Israel will also realize taxes of at least $1 billion, according to estimates.
Netanyahu: “Israel is becoming a global technology center“
Yesterday, Israel’s Prime Minister Benjamin Netanyahu spoke by phone with Aviram and congratulated him on the largest deal in the history of Israel, “which is a source of Israeli pride,” according to a statement.
“The deal dramatically proves that the vision which we are leading is being realized,” Netanyahu said. “Israel is becoming a global technology center not just in cyber but in the automotive sector as well.”
In a letter to Mobileye’s 600 employees, Aviram wrote: “Amnon (Shashua) and I will continue running Mobileye just as we have done in the past. We will continue to do what we believe is best for our business, our goals and our long-term vision.”
He further stressed that “combining forces will help accelerate our plans and lower our execution risks. We aim to become the leading team in autonomous driving. We want to make an impact on the world, and this acquisition will enable us to accomplish that. The transaction with Intel provides a huge opportunity to leverage each other’s strengths and move faster towards our long-term vision.”
The two companies will now compete together against Tesla, Google’s Waymo and Uber, which all develop driverless cars. By joining forces, Mobileye and Intel “can enhance and accelerate our combined know-how in the areas of mapping, virtual driving, simulators, development tool chains, hardware, data centers and high-performance computing platforms,” Aviram said in a statement. “Together, we will provide an attractive value proposition for the automotive industry.”
Intel is also looking forward to leading the autonomous car sector into the future: “I can’t wait to begin working with the combined global autonomous driving organization,” Brian Krzanich, Intel CEO, wrote to his employees. “As you’ve heard me say, others predict the future. At Intel, we build it. This is not the first time we’ve taken bold steps that have transformed our future, the industry and the impact of technology on the world.”
He adds that the Mobileye acquisition “puts us in the driver’s seat to achieve our vision of creating the technology foundation on which the future of autonomous driving will be built.”
Photos and video: Intel, Mobileye