Japan's Rakuten acquires Israeli tech company Viber for $900 million

Israeli-founded video and chat company is registered in Cyprus but was founded by Israelis and has local development offices.

By NIV ELIS
Viber logo (photo credit: Courtesy)
Viber logo
(photo credit: Courtesy)
Japanese Internet services company Rakuten on Friday acquired Israel-founded company Viber Media for $900 million.
The company, which is officially registered in Cyprus but was founded by Israelis and maintains a development center here, boasts 300 million registered users, who use the program to make calls and send texts to others using mobile data plans or WiFi. For people with limited minutes and text messages on their mobile plans, that can be a major saver, though the app has run afoul of several mobile companies as a result.
“Viber understands how people actually want to engage and have built the only service that truly delivers on all fronts. This makes Viber the ideal total consumer engagement platform for Rakuten, as we seek to bring our deep understanding of the consumer to vast new audiences through our dynamic ecosystem of Internet services,” Rakuten chairman and CEO Hiroshi Mikitani said.
The company was founded in 2010 by four Israelis: Talman Marco, Igor Megzinik, Sani Maroli and Ofer Smocha.
Because Viber is registered abroad, however, Israel will not receive direct tax revenues from its sale. In 2013, tax inflows from large exits from companies such as Waze helped push down the state’s deficit.
That didn’t stop Economy Minister Naftali Bennett from praising the deal. “Viber – the answer to those who shudder from boycotts,” he wrote on his Facebook page.
Despite its foreign registration, Bennett added, the state would receive some extra revenues from capital gains taxes and the Israeli entrepreneurs’ income tax, though those would fall well below the level of revenues generated by an exit of a company registered in Israel.
Earlier in the week, Calcalist broke the story that a large Asian giant was seeking to acquire Viber for $300m.-$400m. Marco, Viber’s CEO, denied that the company was up for sale.
Its Israeli origins have aroused suspicion in some Muslim Eastern countries that the app was being used as a spy tool, an allegation Marco denied. Iran, Syria, Lebanon, Pakistan, and Saudi Arabia have all, at some point, banned the app.
Some of them were more concerned with repressing communication than fears of Mossad infiltration.
Viber is just one of a handful of Rakuten’s recent international acquisitions. The company, listed on the Tokyo Stock Exchange, recently bought Canadian e-book company Kobo, Spanish TV and movie streaming site Wuaki.tv and Singaporean video streaming site Viki.
“As Rakuten aims to become the world’s No.1 Internet services company, this acquisition will enable Rakuten to penetrate new markets with multiple digital content offerings, in combination with its e-commerce and financial services platforms,” a statement by Rakuten read.