The next big Israeli tech success, according to many industry analysts, is likely to be video platform Kaltura. Last week, the company secured $47 million in new financing, in a funding round that included money from the investment arms of companies like Nokia, SAP, Intel, Mitsui, and others. Kaltura’s video platform is in use on over 300,000 web sites to manage and deliver video and other content.
According to analysts, Kaltura is due for an exit – either a buyout or an IPO. Kaltura was established in 2006, and with its latest funding round the company has raised $105 million since then. Nearly all Israeli companies that have gone public raised significantly less money, statistics compiled by the Israel Venture Association and other groups showed.
Kaltura, with R&D in Israel and a sales office in New York, supplies organizations turnkey solutions that allow them to immediately upload, deploy, serve, and publicize video content, either on the Internet or within an organization. Kaltura claims to have the fastest-loading video player on the Internet, and it supplies dozens of programs and plug-ins to integrate with online platforms, as well as with video sites.
Kaltura boasts a plethora of customers, from large to small and in a wide variety of areas. Among them are media companies — HBO, ABC, Warner Brothers, Paramount, DirecTV, Turner, and Wikipedia — large corporations such as Bank of America, Intel, SAP, Century 21, Ericsson, Danone, Accenture, AstraZeneca, Nestle, Philips and IKEA — and educational institutions such as Harvard, Yale, Stanford, Durham, Warwick, Princeton, Cornell, Columbia, California State University and NYU. Kaltura has also snagged numerous awards, receiving kudos and being included on top ten lists published by consulting companies, business magazines, and tech sites like Gartner, Forrester, Inc. Magazine, Forbes, Business Insider, and others.
Until now, the company has concentrated its marketing efforts in Europe and North America, but Kaltura is ready to spread its wings, said CEO and Chairman Ron Yekutiel. “The rapid adoption of our technology around the globe is a testament to the central role that video plays in every facet of our connected lives,” he said. “We are proud to enable and streamline the creation of hundreds of video-enabled applications and workflows, and to assist hundreds of millions of people to improve the way they work, learn, collaborate, and entertain using video.”
That Kaltura is perhaps on the verge of something big was hinted at by none other than Economics Minister Naftali Bennett. Congratulating the company on its latest accomplishment, Bennett said that the company’s success was due to the capabilities and talents of the people behind the company. In this case, Michal Tzur, one of the founders of Kaltura, who back in the 1990s, had established security company Cyota with Bennett, Lior Golan, and Ben Enosh.
After selling Cyota to security organization RSA (which itself was swallowed by EMS), Tzur went on to establish Kaltura with Yekutiel, Shay David, and Eran Etam. While he wasn’t “sold on their product” (an open source video platform) initially, Bennett wrote in a Facebook posting, the product has gone through several evolutions, and now is a very viable commercial product. “It teaches you that what matters most is quality of people, not the product,” he wrote. With the new windfall, Kaltura would be hiring 200 new people in Israel, Bennett wrote.
Seemingly going off on a tangent, Bennett then asked: “Are exits really that bad? I often hear complaints that Israeli high-tech companies sell out to foreign companies, and what a shame it is that they do not expand domestically into huge companies, like Check Point, for example.
“There is something to that point of view. But there is also an additional big advantage in selling your company. Look at what happened to our company, Cyota, since we sold it. It has grown to about 350 employees. Michal established Kaltura, which produces hundreds of Israeli jobs.” Not only Tzur, but the other “Cyota refugees” have gone on to establish companies, “creating thousands of new, good Israeli jobs.”
Why Bennett would launch into a discussion of the merits of a buyout vs. and IPO in the context of discussing the company’s latest funding round is unclear, but for Kaltura, it’s business as usual, according to Yekutiel. “We will continue to grow our operations in all four regions this year, as well as further accelerate our product development. Upcoming releases include advanced live, OTT, analytics, and monetization solutions for media companies and service providers; webcasting capabilities for enterprises; and lecture capture capabilities for educational institutions,” he added.