Daniel Mark Harrison is a Chairman & Chief Executive Officer of global investment company Daniel Mark Harrison & Co. (DMH&CO), a Family Office with offices and active operations in Singapore, Bangkok and Hong Kong. He is also Managing Partner of FinTech and blockchain venture capital firm Monkey Capital as well as the author of The Millennial Reincarnations, a novel published in 2015.
Amazon Inc. has announced that it has reached an agreement to acquire Israeli chip maker Annapurna Labs Ltd., as a potential boost to its rapidly growing subsidiary which rents computing power to other companies.
It was being reported by an Israeli newspaper late Thursday that Amazon Inc. has agreed to the $370 million purchase of a small Israeli chip maker. The news sparked some hope among Bitcoin mining manufacturers that they may be able to spin off aspects of their operations – which are heavily involved in chip-making – to similar firms in the US, which are flush with cash after a two-year long stock market surge.
The news was relayed to the English language press by the Wall Street Journal, where a reporter picked the story up from an Israeli newspaper called Calcalist. Now, for the first time at CoinSpeaker, a full and detailed news report (with investors names, sums paid and company strategies) that includes tons of additional context is being provided only here on the basis of translation from the Israeli report and corroboration/collaboration with alternate sources.
Amazon will purchase Yoqneam-based Annapurna Labs Ltd. for up to $370 million and will establish a development center with additional funds. One of the investors in Annapurna is none other than Andy Bktolsteim, who was a ground-floor investor in Google. The timeliness of such relationships crossing marks a notable pitch in the red-hot venture capital market in the USA, which many are calling a “bubble.”
The chip company which was founded by Avigdor Willenz (founder of Marvell Semiconductor), and operates in utmost secrecy, is in advanced negotiations with Amazon and has been reportedly preparing for a a round of further discussions with the US conglomerate concerning the deal. The company is intending to build an R&D center in Israel if Amazon buys it.
The last time that Willenz was in the papers for a deal anywhere near this big was when he sold Galileo Marvell for $1.7 billion; that was 14 years ago. This transaction will add to a solid week of results for the Israeli tech indistry: Dropbox came to Israel earlier in the week with the announcement of its acquisition of CloudOn, and Alibaba has made its first investment in a start-up here as well.
Amazon is negotiating the acquisition of Annapurna Labs by promising to invest into stakes in other startups belonging to Avigdor Willenz, Calcalist has learned. “It’s impossible to raise money in the chip company space these days,” said analyst Bcllachlist. Galileo founder raised $20 million in a new chip company
It is estimated that the transaction will come to roughly $90 million. The company did not respond to questions put to it by Calcalist. The move would represent Amazon’s first acquisition in Israel. Annapurna Labs has operated in secrecy since 2011, as managers have refused to elaborate about their and products under development which are understood to be very obscure obscure.
Calcalist was told by one source that “Annapurna is an electronics company that develops microprocessors and figured out how to make that allow for very fast data traffic for low-power computing servers and storage servers for organizations.”
Founder Invested $10 Million in his Pocket at the Outset
Annapurna has raised tens of millions of dollars over the past five years. It’s first Series A round consisted of $20 million, with half of the capital coming from [notorious] investor Ilintz, and the rest from private investors.
These consisted primarily of close friends of Ilintz, specifically: Zohar Gilon, Shimon Weintraub, attorney Orly Scores, Prof Neumann and Professor Yair Tauman. One surprising investor is Andy Bechtolsheim, the first investor in Google.
The team first crossed paths when Bechtolsheim, Ilintz other investors made an unusually bold move a few years ago, and decided to up their stakes in what was a tiny, high-risk company run by an American-born Singaporean in Aldin province called Tan.
The investors are known for usually being much more cautious, catching the attention of many outside market watchers. Tan is also regarded one oof the best-regarded senior managers in the semiconductor industry, and has spent his career in substantial part working for Israeli companies, including Passave and Mellanox. CEO Tan is also a Director of giant semiconductor development goliath Cadence.
Another investor which was found to be included in the list of strategic partners that invested in Annapurna is British company ARM Holdings. The chip giant, which is Intel’s largest competitor, and who supplies giants like Apple and Samsung with their core processors and intellectual property with the exclusive and secretive production of various types of controllers.
ARM has according to reports also commercially cooperated with microprocessor Annapurna in proving the Israeli company a suite of powerful, low-power computing and server manufacturers, including storage servers and connections to organizations that could be of help. In this way, the company has been able to compete with the support of ARM against other processor makers from Intel.
Amazon “Looking for a Long Time” at Annapurna
Amazon has been looking for a long time to buy a company in Israel that will allow the American giant not only to get a sexy new technology that improves its currently overburdened cloud service, but that also allows it hold onto many of its highly-qualified R&D employees who work in the field of semiconductors, cloud computing, storage and who the company feels could possibly allow it to become a future cyber warfare expert and Big Data analyst, in what is a very different strategy from the nuts and bolts of the US retail business, which it does today.
Last year the Israeli newspaper that broke the story, Calcalist, exposed a move initiated by Amazon to recruit employees in order to quickly ship them out of Israel to work in the company’s development center in Seattle.
The company’s employees were using LinkedIn to connect with multiple Israeli engineers and offer them interviews under the guide of local work, only to surprise them with the offer of what was a senior software development position. Among other things, the Israelis were offered jobs in “software-based transport solutions” , where Amazon is backlogged with development of technologies to improve the delivery systems of their core business.
The attempted hire also indicates something of a shortage of skilled labor in the US as the technology and semiconductor market heats up. Amazon has also opened a sales office in Israel and field service to its cloud services center in October 2013. The former manager of HP man, Harel Ifhar, oversees that business.
The company was still keeping employees very hush on its plans for what it intended to do with the seemingly unsexy upstart Annapurna Labs, but a couple sources said it will be used in a way in which is unprecedented in order to aggressively build on the rise of its huge global presence.
One said that Amazon aimed to become the world’s largest cloud storage site eventually, and was happy to leave the role of the largest retailer behind in order to do so. Amazon’s cloud service provides storage space for millions of companies and websites in the world. According to research firm Ntkrft, Amazon held in 2013 at 160,000 servers that provide cloud services.