FT : Robinhood upstarts who ambushed financial establishment

Robinhood upstarts who ambushed financial establishment
Brokerage founders who wanted to ‘help the everyman’ have joined the super-rich

Baiju Bhatt was walking barefoot around Palo Alto in 2013 when he realised his new company Robinhood was on the verge of bankruptcy. 

After a meeting with venture capitalist Tim Draper — sealed by a promise along with his co-founder, Vlad Tenev, to forgo a salary — the start-up was saved.

“I began riding my bike to work and went to Whole Foods and bought a bunch of rice and beans, went into hibernation mode and it was one of the most creative moments of my life,” Mr Bhatt said in 2018. “I just stopped caring if I failed.”

These days Mr Bhatt and Mr Tenev have little reason to worry about money. Since founding Robinhood, the former Stanford University roommates have built the business into a discount brokerage valued at $11.2bn after a funding round announced this week.

The platform’s value has risen almost 50 per cent since before the pandemic as the boom in retail investing this year thrusts the company and its founders into the spotlight.

That is despite a crushing setback in February and March when the company’s technology seized up, with a series of outages stranding users from the markets during some of the most volatile days of trading since the financial crisis.

Angry customers blasted the company online and overwhelmed its support facilities, while lawsuits quickly emerged aiming to recoup losses — a boon to established rivals such as Charles Schwab and E-Trade that Robinhood has tried to displace.

But the incident is now a fading memory. Customers are flocking to the platform — 3m in the first quarter, bringing its user base to 13m. Robinhood has become synonymous with the boom in retail investing that has drawn millions of people to the markets — many for the first time — to join the roaring rally that began in March and this week pushed the S&P 500 to an all-time high.

As a student Mr Tenev was “bright and extremely interested” but also “slightly disorganised”, with bursts of progress punctuated by distractions, according to Larry Guth, a maths professor at MIT who taught him at Stanford.

Mr Bhatt was a maths whizz but was also known as a “music expert and an incredible band leader as part of a group called The Institute for the Advancement of Funk and Soul”, said Josh Constine, an investor at venture capital firm SignalFire and friend to both founders.

The surging value of the company has confirmed the co-chief executives’ super-rich status, with each reported to hold stakes in the company worth more than $1bn.

The pair have said they took inspiration from the Occupy Wall Street protests, which they attended while working in New York in 2012. Robinhood often states its aim is to “democratise finance” by reducing the cost of accessing the markets. 

“We didn’t build Robinhood to make the rich people richer,” Mr Bhatt told the FT in 2016. “The mission is to help the everyman, the rest of us.”

Robinhood makes most of its money by selling users’ orders to market makers including Citadel Securities, a Wall Street titan majority-owned by billionaire hedge fund manager Ken Griffin. Citadel makes money on the difference between the price to buy and sell the stocks and options, known as the spread.

“They’re sleeping with the enemy in some respects,” said one Wall Street executive who has often dealt with the pair. “There is a little bit of an oxymoron by calling it Robinhood . . . The company is worth $11.2bn — it’s not a charity, that’s for sure.”

Jan Hammer, a partner at Index Ventures who led the group’s first funding rounds and is a Robinhood board member, was attracted by the pair’s idea to target young financial novices.

They wanted to reach a “new group of people who haven't engaged much with financial products or were disheartened with the world of finance post the financial crisis”, Mr Hammer said. 

In June the company came under fire when Alex Kearns, a 20-year-old student from the suburbs of Chicago, took his own life after wrongly believing he had lost nearly three quarters of a million dollars on an options trade on the platform. In a note left for his family he blasted Robinhood. 

Kearns’ death sparked criticism that Robinhood was encouraging risky behaviour among young, inexperienced investors with its sleek interface, alerts and confetti when users complete their first trade, and the founders committed to review elements of the platform.

“When Baiju and I first started building Robinhood, people told us we were trying to achieve the impossible,” Mr Tenev told the Financial Times. Pointing to the trading commissions that dominated the industry until they disappeared last year in a move partly attributed to Robinhood, he added: “Our model has been a catalyst.”

FT : Brokerage Kepler switches analyst’s coverage in France after ‘intimidation’

Brokerage Kepler switches analyst’s coverage in France after ‘intimidation’
Casino and Metro condemn threatening behaviour towards employee who has been assigned to alternative stocks

Kepler Cheuvreux has informed clients that one of its equity analysts has received “anonymous intimidation attempts”, which the brokerage firm said was because of her coverage of certain European retailers. 

The brokerage, whose shareholders include European banks such as Crédit Agricole and UniCredit, emailed its clients on Wednesday to explain that the threats led to a “change in the perimeter of coverage” for the analyst. The brokerage added that the intimidation attempts were “in relation to some of her publications in the food retail sector”.

The Kepler employee, who has worked in equity research for banks and brokerages for more than 20 years, has now stopped covering French supermarket group Casino and German wholesaler Metro as a result, according to emails seen by the Financial Times. 

While the analyst in question had a “hold” rating on Metro, indicating a neutral view on the company’s stock price, she had a “reduce” rating on Casino, predicting that its badly battered shares would likely fall further. 

Metro said that it appreciated the “always good and constructive co-operation” with the analyst concerned and condemned any threats made against her.

“We expressly declare our solidarity with her in the face of such intimidation attempts,” the German company added.

Casino said it had “taken note” of Kepler’s statement about the analyst. “We do not have more information on this topic. Of course, we condemn any intimidation against anyone,” it added.

Kepler did not respond to requests for comment.

Casino’s share price plunged to its lowest level in decades last month, after the heavily indebted French supermarket group reported weaker profits as Covid-19 pushed up costs.

The stock is controlled by French businessman Jean-Charles Naouri, who put the group’s parent companies into a court-protected restructuring procedure last year. Known as a procédure de sauvegarde under French law, it is similar to a bankruptcy proceeding and gives Mr Naouri more than a decade to pay down substantial debts that sit above Casino itself.

Kepler took its negative stance on Casino’s shares in May 2019, a week before its chief shareholder filed for creditor protection, telling clients that its immediate parent company Rallye was “likely to be virtually bankrupt” in coming years.

Mr Naouri has been outspoken in his criticism of short sellers who bet against his company’s share price, telling the Financial Times in 2018 that they do so “at their risk and peril”. 

Critics of Casino have previously complained that they have fallen victim to harassment or surveillance. In late 2017, US investor Carson Block, who had been shorting Casino’s shares, revealed an incident in which a French corporate intelligence operative posed as a Wall Street Journal reporter in an attempt to uncover more information about his hedge fund’s strategy.

While Mr Block has said that he believes Casino or Mr Naouri may have been behind the move, they have consistently denied any role in the matter.

FT : M&S puts all its eggs in Ocado’s basket

M&S puts all its eggs in Ocado’s basket
As Covid-19 batters its clothing business, retailer hopes to profit from online grocer tie-up

In less than two weeks, Ocado will find out what its customers valued more: its slick website and customer service or the upmarket groceries supplied to it by Waitrose.

But for Marks and Spencer, whose produce will replace Waitrose’s on Ocado’s site from September 1, the stakes are even higher.

For the 136-year-old retailer, which this week announced 7,000 job losses, the biggest cull in its history, the Ocado tie-up is a key part of its strategy to boost food profits as the coronavirus pandemic piles pressure on its clothing business.

It will take M&S, whose food shoppers currently spend an average of less than £20 per visit, into the online grocery market — the fastest-growing part of the sector — for the first time.

“Ocado was an absolute no-brainer,” said Stuart Machin, a veteran of three of the UK’s four biggest supermarkets who was hired to run M&S food in 2018. The typical Ocado customer spends more than £100 on every shop.

Mr Machin’s plan is for customers to do more family-sized shops in M&S, as well as the “top-up” visits they currently make.


“Customers came to see M&S as a place for top-up, convenience or special-occasion shopping,” he said. “We can’t be all things to all people and we can’t have every brand — but we can be a viable solution for a family shop.”

The Ocado launch comes at a pivotal juncture for M&S. The retailer has been in relative decline for more than a decade but the pace has accelerated in recent years. Profits have slumped, along with the share price, it has racked up almost £2bn in exceptional charges, and its clothing business has defied repeated attempts to reverse sales declines.

Last year, it was ejected from the FTSE 100 for the first time since the index’s inception. Asos, an online fashion retailer founded in 2000, is now valued at more than twice as much.

Supplying Ocado will generate more volume for M&S. But it will also put the full range of M&S products in front of a larger audience. That is significant because only a small number of its own stores are able to stock its full range.

Mr Machin’s push for a bigger share of customers’ wallets has brought a rethink on pricing. This week, the company launched an advertising campaign highlighting what it has dubbed “remarkable value”, such as cutting the price of a white loaf from £1.15 to 65p.

“We wanted to be a bit more competitive on the items that people buy the most,” he said.


But the pivot to food brings risks of its own.

While M&S’s share of the food market is small, its business has been far more profitable than rivals’. Over the four years from 2015 to 2018, Ocado Retail made an average operating margin of 0.8 per cent, according to its statutory accounts. In the last of those years, M&S’s own food business achieved 3.6 per cent.

Some worry that the quest to widen its appeal will result in M&S swapping high-margin baskets for low-margin trolleys. “That is a danger,” said independent commentator Richard Hyman. “It is not at all clear to me how M&S is going to prevent significant margin dilution here.”

“If you include clothing, which they seem to be managing down in size, then lower-margin sales are going to be an ever bigger part of the mix,” he added.

Food profits were greater than those of clothing last year, the first time the profit split has been disclosed. Over the next two years, the gulf will be wider still because of the impact of Covid-19.

M&S spent £750m buying a half-share of Ocado’s retail business and the pandemic has made its stake a more valuable asset — on some estimates, it accounts for almost all the equity market value of the company. But M&S can only book a share of its profits, and they are not large. Last year its contribution, for seven months, was £2.6m.

Mr Machin played down the idea that food would soon be driving the business. “We’ve got a great food business with a lot of loyal customers. We’ve a great brand and we have lots of stores where prior to Covid both food and clothing were doing well.”


But one burden for M&S is the nature of its store estate, which did not evolve with family shopping trips in mind. Most of its larger stores are in high streets, where layout, access and parking present problems, while many of its Simply Food outlets are too small to carry large ranges.

“We are probably still too weighted towards small footprints at the moment,” Mr Machin acknowledged.

M&S was already planning to close more than 100 of its older high street stores and relocate some to out-of-town parks where access is easier.

The pandemic’s impact on the business has forced it to take a tougher stance on its bloated cost base, to bring it in line with falling sales.

“We did have targets [for various types of store] before but we are putting the rule over it again,” Mr Machin added. “It may be that in future there are some stores with more food space than clothing, but we need to get through these next few months and then look again at that bigger strategy.”

Another person familiar with the business pointed out that while upgrading the Simply Food estate to bigger premises was relatively easy, swapping high street stores for units on retail parks was not.

“I think Archie [Norman, M&S chairman] has found it a lot harder than he thought to get out of those high street stores,” the person said. So far, it has only closed 56 of them.

Jan Clark, a customer using the M&S Food Hall in Rayleigh, a commuter town in Essex, said the store was not yet a place where she could do all her shopping, even though it is one of only about 30 stores that does stock the full M&S range.

Given the time and expense required to make the retailer’s store estate more food-friendly, and the problems that Covid-19 is causing an already challenged clothing business, it is clear why there is so much riding on the Ocado tie-up.

>>> What to look at today - 21st of August 2020

Asian stocks, U.S. and European equity futures climbed Friday as technology shares continued to drive gains, tempering concern over a bumpy economic recovery. The dollar edged lower.
Stocks saw a modest advance in Hong Kong, China and Japan, following a fresh Nasdaq 100 record overnight. Volumes were below average. South Korean stocks pared some of Thursday’s slump as data showed a slide in exports eased. S&P 500 futures edged higher, while the 10-year Treasury yield was steady. The offshore yuan rose to its highest level in seven months.
The S&P 500 posted a moderate climb Thursday, when a technology rally offset a slide for energy producers and banks amid light volume. The benchmark had shrugged off earlier weakness from disappointing jobs data.
US After Hours MOBL +11.8% jumps on Bloomberg report of possible sale; GAN -14.2%, OSIS -2.8% down on earnings

Nikkei +0.27% Hang Seng +1.33% CSI +0.78% Shanghai +0.48% Shenzen +1.10%

Eur$ 1.1882 CNH 6.8972 CNY 6.9058 JPY 105.59 GBP 1.3245 CHF 0.9064 RUB 73.8129 WTI$ 42.87 +0.12%

S&P +0.18% Nasdaq +0.18% EuroStoxx +0.34% FTSE +0.008% Dax +0.48% SMI

Macro :
- Japan July Department Store Sales Fall 20.3% Y/y (Table)
- CDC Chief Says Outbreak in South Slowing, Deaths Should Slow
- Jack Ma’s Ant Said to Target $225 Billion Valuation in IPO (1)

Keep an eye on :
- ADYEN NA : Adyen CFO Says Regulations Should Prevent Another Wirecard
- ADYEN NA : Adyen Holders to Offer Shares
- AFG NO : AF Gruppen Second Quarter Revenue Misses Lowest Estimate
- ASSAB SS : Assa Abloy Completes Acquisition of Agta Record Majority Stake
- BANB SW : Bachem Sees Full Year Revenue Above +20%
- BAYN GY : Bayer to Pay About $1.6b to Resolve Most U.S. Essure Claims (1)
- IAG LN : British Airways Union Members Call for Strike Actions
- CNA LN : NRG Boosts Revolving Commitments; Centrica Holders OK Deal
- CWK LN : Cranswick to Shut Northern Ireland Meat Plant on Covid-19 Cases
- DMP GY : Dermapharm First Half Adjusted Ebitda EU92 Mln, +2.2% Y/y
- GMAB DC : Genmab Reports Janssen Gets U.S. FDA Approval for Darzalex
- GSK LN : AnaptysBio Says Glaxo Breaches License Agreement Obligation
- MC FP : Tiffany's Steady Dividend Could Raise Deal Confidence: React
- MKS LN : M&S puts all its eggs in Ocado’s basketAs Covid-19 batters its clothing business, retailer hopes to profit from online grocer tie-up - FT - https://on.ft.com/3hiwrGe
- MEKO SS : Mekonomen Second Quarter Ebit Beats Highest Estimate
- NOVN SW : Novartis: FDA Approves Kesimpta for Multiple Sclerosis
- SLN LN : Silence Therapeutics Registers 17.9m ADSs for Holders
- TIF US : Tiffany Sees Flagship Store Renovation Done in Spring 2022
- TIF US : Tiffany's Steady Dividend Could Raise Deal Confidence: React
- FP FP : Islamist Attacks in Mozambique Threaten to Disrupt Total-Led Natural-Gas Project
- UBXN SW : U-blox First Half Revenue CHF174.0 Mln
- FHZN SW : Zurich Airport First Half Ebitda CHF104.9 Mln, -65% Y/y

>>> Europe : Brokers Upgrades & Downgrades - 21st of August 2020

>>> Up
* Accentro Real Estate Raised to Buy at Quirin Privatbank AG
* CNH Industrial Raised to Buy at Melius; PT $10
* Humana Raised to Buy at Handelsbanken; PT 64 kronor
* PSP Swiss Raised to Neutral at JPMorgan; PT 105 Swiss francs
* Sampo Raised to Overweight at Morgan Stanley; PT 39 euros
* Wienerberger Raised to Accumulate at Erste Group

>>> Down
* Bellway Cut to Hold at Deutsche Bank; PT 2,422 pence
* John Mattson Fastighetsforetagen Cut to Hold at Handelsbanken
* Kojamo Cut to Neutral at JPMorgan; PT 21.30 euros
* Latour Cut to Sell at DNB Markets; PT 165 kronor
* Lundbeck Cut to Add at AlphaValue
* Maersk Cut to Neutral at JPMorgan; PT 10,368.70 kroner
* Petrofac Cut to Market Perform at Bernstein; PT 170 pence
* Saipem Cut to Market Perform at Bernstein; PT 2 euros

>>> Initiation
* NEL Rated New Buy at Berenberg; PT 23 kroner
* PowerCell Sweden Rated New Hold at Berenberg; PT 250 kronor

>>> Call
* Berenberg Sees Material EU Hydrogen Opportunities, Says Buy Nel
* Hammerson Restructuring Comes With Significant Challenges: RBC
* Humana Cheap, 2Q Increases Confidence in Stock: Handelsbanken
* Sampo Best Play on Nordic Underwriting Profits: Morgan Stanley

>>> US Close Dow +0.17% S&P +0.32% Nasdaq +1.06% Russell -0.49%

Closing Stock Market Summary

The large-cap indices closed higher on Thursday, as the upwards momentum in the mega-caps overshadowed any underlying weakness in the market. The Nasdaq Composite rallied 1.1% for another record close, while the S&P 500 (+0.3%) and Dow Jones Industrial Average (+0.2%) posted smaller gains. The Russell 2000 declined 0.5%. 

The session did start on a lower note after weekly initial claims increased by 135,000 to 1.106 million (Briefing.com consensus 990,000), which fueled recovery concerns amid stalled negotiations surrounding the next coronavirus relief bill. That might have explained the clear advantage declining issues had over advancing issues at the NYSE and Nasdaq.

Overall price action, though, has become more intertwined with the constantly growing mega-cap stocks: Apple (AAPL 473.10, +10.27, +2.2%), Microsoft (MSFT 214.58, +4.88, +2.3%), Amazon (AMZN 3297.37, +36.89, +1.1%), Alphabet (GOOG 1581.75, +34.22, +2.2%), and Facebook (FB 269.01, +6.42, +2.4%), which have thrived in the precarious environment. 

The big gains in these stocks today carried the information technology (+1.4%), communication services (+1.4%), and consumer discretionary (+0.1%) sectors into positive territory, and the real estate sector (+1.1%) also showed strength after underperforming yesterday.

These were the only sectors that finished higher. The energy sector fell 2.1%, but no other sector lost more than 1.0%. 

Separately, Uber (UBER 31.41, +1.99, +6.8%) and Lyft (LYFT 29.76, +1.62, +5.8%) were granted a reprieve in their disputes over driver classification in California, sending shares of both companies higher by 6%. LYFT was down as much as 8.5% after the company previously announced plans to suspend California operations at midnight. 

In other corporate news, Intel (INTC 49.17, +0.84, +1.7%) announced a $10 billion accelerate stock repurchase program, NVIDIA (NVDA 485.64, +0.10, unch) reported positive earnings results and upbeat revenue guidance, and Estee Lauder (EL 198.27, -14.23, -6.7%) disappointed investors with its earnings report. 

U.S. Treasuries finished the day with modest gains. The 2-yr yield declined two basis points to 0.12%, and the 10-yr yield declined three basis points to 0.64%. The U.S. Dollar Index declined 0.2% to 92.74. WTI crude futures declined 0.6%, or $0.27, to $42.62/bbl.

Reviewing Thursday's economic data:

  • Initial claims for the week ending August 15 increased by 135,000 to 1.106 million (consensus 990,000). Continuing claims for the week ending August 8 decreased by 636,000 to 14.844 million.
    • The key takeaway from the report is that it covered the week in which the survey is conducted for the August Employment Situation Report. The jump in initial claims above 1.1 million is going to temper economists' expectations for gains in August nonfarm payrolls.
  • The Conference Board's Leading Economic Index (LEI) increased 1.4% m/m in July (consensus 1.1%) on the heels of an upwardly revised 3.0% increase (from 2.0%) in June. This was the third straight monthly increase for the index following three straight monthly declines for the February-April period.
    • The key takeaway from the report is that, despite three straight monthly increases, the July index level of 104.4 remains 6.6% below the 111.8 level seen in February (i.e. the pre-COVID shutdown phase).
  • The Philadelphia Fed Index decreased to 17.2 in August (consensus 21.0) from 24.1 in July.

Looking ahead, investors will receive Existing Home Sales for July on Friday. 

  • Nasdaq Composite +26.6% YTD
  • S&P 500 +4.8% YTD
  • Dow Jones Industrial Average -2.8% YTD
  • Russell 2000 -6.2% YTD

Fwd:Briefing; WRAPX; After Hours Summary: MOBL +11.8% jumps on Bloomberg report of possible sale; GAN -14.2%, OSIS -2.8% down on earnings

After Hours Summary: MOBL +11.8% jumps on Bloomberg report of possible sale; GAN -14.2%, OSIS -2.8% down on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: KEYS +4.2%, ROST +0.6%

Companies trading higher in after hours in reaction to news: MOBL +11.8% (co will explore potential sale, according to Bloomberg), GLDD +4.5% (announces dredging awards totaling $117.8 mln), XERS +4.5% (names new COO), PSTX +3.4% (provides operational update), SRNE +3.3% (to acquire SmartPharm), XSPA +3.3% (opens XpresCheck COVID-19 testing facility), MTBC +2.6% (stock offering), KOD +0.4% (enters into Bioconjugation Addendum with Lonza), GMAB +0.3% (announces FDA approval of DARZALEX; also to transition Arzerra to an oncology access program), AMGN +0.3% (gets expanded FDA approval for KYPROLIS), FB +0.1% (CEO interviewed by FTC re antitrust probe, according to Politico), GE +0.1% (extends CEO's employment contract)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: GAN -14.2%, OSIS -2.8%

Companies trading lower in after hours in reaction to news: MIK -1.1% (names new CFO), UNM -1% (files mixed securities shelf offering), MIST -0.9% (stock offering), BDX -0.6% (provides update on recall of BD Alaris System hardware), SAIC -0.1% (awarded $133 mln US Navy contract)

TechCrunch : Apple quietly acquired Israel’s Camerai, formerly Tipit, a speciali

Report: Apple quietly acquired Israel’s Camerai, formerly Tipit, a specialist in AR and camera tech

Apple is well known for picking up smaller startups on the hush-hush to augment its business, and today news leaked out about the latest of these… nearly two years after the fact. Sometime between 2018 and 2019, the iPhone giant reportedly acquired and shut down Camerai, an augmented reality and computer vision company based out of Israel, which used to be called Tipit.

The news was first reported earlier today by Israeli newspaper Calcalist, and we have reached out to ask Apple directly about it. In the meantime, Jonathan (Yehonatan) Rimon, who had been Camerai’s CEO and co-founded the company with Moty Kosharovsky, Erez Tal, and Aaron Wetzler, declined to comment one way or the other on the report to us when we contacted him directly about it. A separate source confirmed the story to us. We’ll update as we learn more.

Calcalist said that the startup sold for several tens of millions of dollars. From being founded in 2015, Camerai had raised around $5 million — including a $2.5 million round in 2017 and another unreported $2.5 million in 2018 — with investors including the Atooro Fund and another called the SKO Fund.

It seems that the acquisition came on the heels of multiple approaches from a number of companies at a time when AR was arguably at a peak of hype and many big tech companies wanted a piece of the action. (Recall that 2018 was the year when Magic Leap raised nearly $1 billion in a single round of funding.) Back in 2018, we heard rumors that those approaching and looking at the startup included Apple, Samsung, and Alibaba.

The Calcalist report said that Camerai employees joined Apple’s computer vision team, and that the company’s technology has been incorporated into Apple products already. It’s not clear specifically where and when, but recall that both iOS 13 and iOS 14 have featured big software updates to the camera.

Camerai had built an SDK and specifically a range of software-based AR tools to help edit and use camera-made images in more sophisticated ways,

Its tech included the ability to detect different objects in the picture, and outline them with precision to alter them cosmetically; the ability to outline and apply filters across the whole image; a “skeleton tracking” neural network API that could detect and draw body joints in real time overlaid on a picture of a human; and its own version of selective focus for enhanced portrait modes (remember this was 2018 and this was not standard on phones at the time). Camerai’s site is shut down, but here are some screenshots of how it all looked, pulled from the Internet Archive:

Screenshot 2020-08-20 at 15.56.12Screenshot 2020-08-20 at 15.56.20
Screenshot 2020-08-20 at 15.56.31View 4 Photos
Camerai’s acquisition underscores a couple of interesting, and ongoing, trends.

The first of these is in the development of smartphone technology, particularly around cameras. Some of the more interesting innovations in smartphone camera technology have come not out of improvements in hardware, but software, where the application of breakthroughs in artificial intelligence can mean that an existing combination of sensor, lens, and on-phone and cloud processors produce a better and more technically dynamic picture than before.

At a time when smartphone replacement cycles have really slowed down and we are seeing also slower innovation on hardware, bolting on talent and tech created outside the phone companies is one way to gain a competitive edge.

(Separately, I wonder if making cutting edge technology software-based also means that there could be scope in the future for paid updates to older phone models, which could mean more incremental revenues from consumers that don’t want to invest incompletely new devices.)

The second trend that this deal underscores is how Israel remains fertile ground for bigger companies on the hunt to pick up and bolt on technology, and that the secretive approach is likely to remain for some time to come.

“In Israel there are over 350 global corporate companies, from 30 countries, who search for local innovation. Some of them like Apple, MS, Google, even have local R&D [operations],” said Avihai Michaeli, a Tel Aviv-based senior investment banker and startup advisor. “Those global companies look mainly for tech which could serve as its competitive edge. It is not the first time that an acquired startup is asked not to publish it was acquired, nor talk about it.”

We’ll update this post as we learn more.