Facebook Invests in Israel with Acquisition of Onavo

Facebook Israel Onavo

This week Facebook acquired Onavo, an Israeli based company that develops technologies to make mobile data networks flow more efficiently. The world’s largest social network purchased the company for a reported $150 - $200 million according to Israeli media sources.

Onavo develops technologies that improve the speed and efficiency of data networks with a focus on the mobile space. Why is facebook interested in this technology? Over the past year Facebook CEO Mark Zuckerberg has become an active campaigner to close the digital divide. This means improving internet access in under served areas with slow or unreliable network connections. If Facebook is successful they will be able to bring expanded internet access to millions improving their everyday lives. Oh, and it wouldn’t hurt if they could join Facebook while they're online too.

Onavo will be Facebook’s 3rd acquisition of an Israeli company. The previous acquisitions, Snaptu and Face.com were shut down in Israel while their proprietary technology was transferred to Facebook.

Unlike those previous purchases Facebook will be using the Onavo purchase to spearhead the launch of an Israeli R&D center. The Israeli business community is thrilled that Facebook will finally be investing in the country rather than simply buying a company to shut it down and transfer the technology back to California.

Facebook will join other tech titans such as Google, Intel, IBM, and Microsoft, all of whom have Israeli research centers.

The purchase of Onavo is a big win for the venture capital firms that had sunk money into the 3 year old company. Onavo raised $13 million in funding over the life of the company from major players in the VC industry including Sequoia Capital, Motorola Mobility Ventures, Horizons Ventures, and Magma Venture Partners.

While the deal between Onavo and Facebook is still dwarfed by billion dollar plus deals done by Cisco and Google over the past few years, it’s still a feather in the cap for Israel’s start-up community.