Facebook CEO Mark Zuckerberg 311 (R).
(photo credit: REUTERS/Sebastien Nogier)
Facebook, operator of the world's largest social network, is buying Israeli start-up Snaptu for an estimated $60-70 million. The transaction, Facebook's first acquisition in Israel, was confirmed by Snaptu on its official blog on Sunday, although the company did not reveal exactly how much was paid.
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Snaptu's application allows mobile phones, even those less advanced than an iPhone or Android phone, to access mobile Internet.
In an interview given to Globes in 2009, founder Lior Tal explained what the company does: “Cellular services aren’t successful in the way that Internet services are successful, because of the problematic user experience offered by the cellular device.
It is extremely difficult to take a website and make it compatible with the hundreds of different mobile devices that can be found in the market, but the program that we are developing allows one to skip over this problem, in that it doesn’t run on the device’s operating system but rather on external services.”
Snaptu’s founders Tal, CEO Ran Makavy, VP development Micha Berdichevsky, and CTO Barak Naveh, will each earn millions of dollars from the acquisition.
Venture capital funds Sequoia Capital and Carmel Ventures have made an
attractive profit from their investment in the mobile Internet
According to the Israel Venture Capital Research Center, over the past
three years $10 million has been invested in Snaptu, formerly known as
Mobilica. The first investors were private individuals and the founders
who put $1 million, more or less, into the start-up. From 2009 there
were two rounds of fund raising with Sequoia investing $6 million and
Carmel Ventures $3 million.
The bottom line is that after just over two years, the two venture
capital funds will receive phenomenal returns. Sequoia which holds 35%
of Snaftu, will receive $25-30 million, while Carmel Ventures will
receive $10-20 million.
In addition to the venture capital funds and founders, other investors
who will earn hundreds of thousands of dollars from the sale of Snaptu
include US company Crowded Ocean and former MK Naomi Blumenthal.