2009 was Tel Aviv’s centennial year and the city’s mayor and municipality marked the occasion with this lovely clip “Tel Aviv 100″.

Even though I may be biased, Tel Aviv is a unique city with electrifying energy. As I board on the plane to Tel Aviv tomorrow, I’ll take the opportunity to wish this favorite city a very Happy birthday!

CloudShare, an Israeli start up previously known as IT Structures, has reported a series B of $10 million led by its existing investors Sequoia Capital and Gemini Israel Funds as well as new investor Charles River Ventures. This ‘Up Round’ brings CloudShare to a total of $16 million raised to date.

CloudShare offers a Virtual Sales Engagement SaaS platform that enables small and mid-sized software and appliance companies to deliver demos, evaluations, and proof-of concept projects online by making solutions available via its platform. The company’s target customers usually lack the resources to buy expensive web cast and streaming technologies, and so Cloudshare provides a cost-effective on-demand tool for marketing, and direct and channel sales.

a Team Manager or Campaign Manager, you’d be able to build new environments (eg, add servers, storage, and networks), change environments or customize them en masse, and add or view other Sales Engineers or Channel Partners and their staff usage

In the press release posted on the company’s website, CloudShare’ CEO Zvi Guterman, commented on the importance of this round:

“Since founding CloudShare in 2007 we’ve been focused on developing our technology, with the promise that it will revolutionize the way sales demos and PoC’s are conducted. We’ve officially come out of stealth mode with marquee customers, a proven cloud-based technology platform, and $10M in funding to help build out our vision. We now have all the right assets in place and we look forward to reaping the benefits in 2010 and beyond.”

Ophir Kra-Oz and Zvi Guterman founded IT Structures in 2007 and have kept the company in stealth mode until Dec 11 2009. Headquartered in Tel Aviv, Israel, Cloudshare plans to expand its R&D center and hire additional developers locally. With its double digit growth and an impressive line up of clients which includes asVMware, Cisco, and SAP, I see a bright future for this Israeli start up.

The Dashboard enables analyzing partner performance

See also: Globes

Israel’s Communications Minister, Moshe Kahlon (Likud), has expressed concern with regard to the lack of competitiveness in Israel’s cellular market. The problem, reports Haaretz, is that the three large operators have relatively equal market shares are acting as a “controlling group” (clearly, this is a euphemism for cartel).

From the end of December, Israel will be offering Mobile Virtual Network Operator (MVNO) licenses. MVNOs are mobile operators which pay for access to the network infrastructure owned by major operators. Consequently, companies are able to enter the cellular market without making upfront investments in capital-intensive infrastructure.

The introduction of MVNO licenses could have a significant impact on the competitive dynamics of Israel’s cellular industry – government research suggests that MVNOs could attract 630,000 customers, or 7% of the cellular market. The challenge facing entrant MVNOs will be to prove that not owning the underlying network infrastructure can be used as an advantage in competing with the major operators.

The track record of MVNOs in other markets has been mixed. In the US, Helio attempted to go up against the major operators by targeting a niche demographic, but had difficulty achieving market traction in a capital efficient manner. In the UK, Blyk made a bold attempt at business model innovation by allowing consumers to make calls for free (on an ad-funded basis), but was ultimately unable to build a sustainable business. Despite the numerous examples of failed MVNOs, however, there have been some successes (including the world’s first MVNO, Virgin Mobile UK).

It will be interesting to see if MVNOs can pose a serious challenge to the major cellular operators in Israel. The prospect of new competition – albeit a form of competition which relies on incumbent infrastructure – is a welcome development for consumers. Rumors about Google’s plans to take a mobile device to market in 2010 without a mobile carrier partner suggests that the imminent issuance of MVNO licenses in Israel could prove most timely.

I’m waiting for my flight in Newark following a redeye from San Francisco and nine hour stop in New York. It was great to be back in the apple and see good friends, but I didn’t miss the cold weather.

Thought I would take this opportunity to give a quick reminder that the first ever Venture Capital Cafe Israeli Startup Roundtable, will be taking place over breakfast in Tel Aviv on the morning of Wednesday, March 26th.

The Roundtable will be a power-breakfast, intended for those interested in furthering business opportunities by introductions. If you are a reader of VC Cafe, an entrepreneur, startup mastermind, ex-pat, VC or angel, please join me and the 45 people who already RSVP’d.

We’ll be meeting at 8:30am in the Aroma Cafe of the Tel Aviv Port (Hangar 9). For all the details and to RSVP, check out the Facebook Event page – I hope to see you there.

As we’ll be taking up a decent space in Aroma, please be prepared to buy at least a cup of coffee. It seemed to have worked Pulver in March 5th.

Globes reports that Genesis partners is getting ready to raise a fourth fund of $150 million in addition to its $518 million under management. I wonder how the timing will affect their level of success. There’s a saying in Heberew: an Optimist is a Pesimist with no prior experience.

On one hand, Genesis recently marked an impressive exit of four or fivefold return on the money, with the sale of portfolio company Kidaro to Microsoft for $80-100 million, in addition to several more successful exits in the past couple of years.

On the other hand, the dollar is the weakest it’s been a few years, the markets are slowing, and it’s hard to see past the mountains right now. It’s not necessarily that things are so bad, but the levels of uncertainty are too high to make a risky move these days.

My friend Shahar Nechmad told me an interesting story today. He went to Sand Hill Road a took a taxi from the Caltrain station in Menlo Park. The taxi driver complained that he almost didn’t have any work in the past couple of months. I don’t know if it’s any indication, but sounds like that the VCs in Silicon Valley are just waiting to see what lurks beyond the next turn. Another friend who met with VCs in the valley recently, told me that some of them instructed their portfolio companies to freeze hiring. So overall, thinks are definitely in the fog.

Are Israeli VCs the next victims of the Financial Crisis?, asks Israeli stock trader Aaron Katzman on Israelnewsletter today. According to Katzman, Israeli publicly traded companies in the US have basically mismanaged their cash and have had to write down large amounts of their cash reserves. There is a danger that VC oversight, might have caused Israeli startups to share the same faith. Startups that didn’t have access to their cash, were exposed to losing 20% of their investments, that serve to cover operating costs. If this is the case Katzman says: “the Israeli VC industry may just grind to a halt”.

Genesis founder and managing partner Dr. Eyal Kishon, talked to Globes about the plans for the fourth fund:

“The new fund will be similar in size to the previous funds. We will continue to work with a strategy similar to that of the previous funds, which as far as we are concerned has proved itself: investing in companies at early stages, especially in companies that aspire to make a big change. The companies we have already set up and invested in are responding well, we have a varied portfolio, and we aim to assemble another one like it. As far as areas of investment are concerned, with Genesis 3 we started to invest in electronic consumer products, media, and solar energy. I believe that we will continue to innovate, because this is a field that doesn’t stand still.”

Genesis hopes to raise the capital quickly and join Pitango and Carmel who have both raised new funds relatively quick in the past six months. Otherwise, it might find itself in the same breath with Walden Israel, who recently closed shop after an unsuccessful fund raising round.

I was down in Microsoft’s office in Mountain View again today, attending “The Business of Web Apps: Where the Web Goes to Work” thrown every year by DealMaker Media since 2003. I was part of this year’s selection committee, who chose 32 startups to present their companies in front of a panel of industry experts and an audience of insiders,  in only 6 minutes.

This year’s UTR had approximately 350 people, mostly tech company biz dev execs, presenting entrepreneurs and according to the website, 16% VCs.  There was also a strong Israeli angle: Five of the startups who presented in the conference were Israeli, or started by Israeli entrepreneurs – that’s almost 20% (!).

These are Israeli startups who participated in Under the Radar 2008:

Nuconomy - the analytics site to measure user engagement and web 2.0 features (I love the “page views” are dead comment by CEO Shahar Nechmad). Nuconomy, a participant of the Israel Web Tour, is based in Israel and San Francisco. It recently raised a series A from WPP. I’ve been using Nuconomy for the last couple of months and it’s really a new way of experiencing site analytics.

PageOnce -  Another web tour alumni, led by Guy Goldstein. PO calls itself the first internet personal assistant to group all their personal accounts into one page including cell phone minutes, airline miles, bills, financial accounts and more, without using multiple browsers. So far the company has raised a series A of $1.5M from Liron Petrushka and Bobby Lent.

Magento, an open source e-commerce platform based in LA, was presented by CEO Roy Rubin. Magento competes with osCommerce, Zen Cart and so on by offering a feature rich system with complete flexibility for the merchants.  The basic version of the software is available for free.  The company has not gotten VC investments to date and it’s completely bootstrapped. See screen shots here.
Support Space – founded in 2006, SupportSpace is a tech support service provider for small businesses. The company is led by co founder and CEO Yair Grindlinger and it is headquartered in RedWood City, CA. So far they have raised a series A of $6.5 million from Gemini Israel fund and BRM Capital.

Clarizen, SaaS project management tool for the enterprise. Provides improved project visibility for management. Clarizen was one of the “graduate companies”, who were selected as sector leaders, but no longer qualify for being “under the radar”.

I spotted a few trends today:

* Focus on monetization – companies are starting to look beyond PPC advertising. Premium services, paid subscriptions and licensing contracts were popular with almost every startup that presented. NuConomy on the other hand, is completely free to the surprise of panel judge Maha Ibrahim of Canaan Partners. According to CEO Shahar Nechmad, the value is in the data.

* APIs, Open Platforms - A large number of products cater to developers. In a not-so-bright comment, a panel member asked “where are all these developers coming from?” – a member of the audience quickly commented that there are over 17 million developers in the US alone. Don’t give them fish, teach them how to build fish factories.

Worth noting, the talk with Amazon’s CTO Werner Vogels and Robert Scoble was very interesting. Vogels is the guy you want with you as a chief technology officer. As a friend of mine put it, he’s so smart in what he does, that you almost feel in owe when talking to him about technology.

Below is a more comprehensive look into today’s Under the Radar:

PRESENTING COMPANIES:
Act-On Software | Blist | Cozimo | DeviceVM | dimdim | DocSyncer | ELASTRA| Eyejot | FeedbackFx | filtrbox | Get Satisfaction | HiveLive | HubSpot | JumpBox | kwiry | LiquidPlanner | Magento | Marketo | Mumboe | NetBooks | NuConomy | Orgoo | PageOnce | Ribbit | SlideRocket | SlideShare | SupportSpace |TimeBridge | Tripit | Universant | Vello | Yoics

GRADUATE CIRCLE COMPANIES:

3Tera | Blogtronix | Clarizen | Longjump | Nirvanix | Q-layer | Smartsheet.com | Transera

(more…)

UK’s Times Online reports about the non-orthodox attempt of Israel’s Shin Bet, the country’s secret service, to shake off its rough image by debuting a blog, written by four anonymous members of the organization. The service hopes to increase recruiting through this new channel.

The blog, launched in Hebrew yesterday, is a compilation of daily testimonies told by four silhouetted members of the Shin-Bet, identified only by the first letter of their names. Every day users can tune in to the site to learn about “N”, head of the QA department and his double life, “A” the software engineer nicknamed ‘the expert’, “H” fondly referred as the “secret woman” serving as a QA engineer and finally “I” the systems integration engineer known as ‘the brain’.

None of the posts in the blog of these four tech-geeks reveals details on real targets, places or names. Instead, the blog portrays the Shin Bet as just another company, trying to attract talent by talking about work hours (one of the bloggers says he’s at home by 6:30pm), salary (”no less than any given tech company”), and facilities (”aren’t gleaming and fashionably designed like I was used to in the world of high-tech”).

The blog is getting quite a few comments, in one of them a reader wrote: “Maybe I’ve watched too many James Bond movies, but you make it sound grey and charmless.” The Shabak (Shin Bet) official site, prominently promotes the new blog on its homepage. Check it out.

Tech Confidential has an interesting post about Sequoia’s latest investments. According to the article, VC giant Sequoia Capital recently added four new companies to its portfolio –all headquartered outside the U.S. One of these companies is an Israeli startup called Cotendo.

What do we know about Cotendo? not much since the company’s website is just a placeholder landing page, which hints that the company must have serious technology if Sequoia decided to get in bed with them.

Sequoia’s website on the other hand, is not blank at all. The fund describes Cotendo as “unique Content Delivery Network (CDN) platform, with better performance and low operational costs”. The lead investor in the deal was Haim Sadger, a Partner with Sequoia Capital Israel focusing on mobile, semiconductor, systems and software investments. Neither Sequoia nor any of three other companies announced the sizes of the investments.

The three other companies who got investments from Sequoia are: Tribi Embedded Technologies Private Ltd., a developer of motor control, pump and cooling drive technology for appliances and electronic devices, 7Strata Inc., an information technology infrastructure management company and lastly, telephony systems developer Data Connection Ltd., which has has been around for almost 20 years.

The word Optimization has been abused in the past couple of years: it can be applied to speed, scalability, SEM and revenue. The latter is where Israeli startup Amadesa Inc excels, describing itself as “provider of website revenue optimization and personalization solutions, delivered over the internet as a service. Carmel Ventures sees the potential and backed Amadesa’s $5.4 million first round of financing.

Founded in Israel in 2004 by CTO Avi Kedmi (also served as first CEO), Avihai Ozana and Nathaniel Zenou, Amadesa helps site owners with almost every aspect of the business, ranging from customer acquisition to different aspects of monetization.

According to the company’s website, Amadesa’s technology provides dynamic content display (via onsite behavioral targeting), product recommendations, shopping cart, and billing form optimization, lead generation, data collection optimization, and A/B and multivariate testing capabilities designed to deliver greater returns on marketing dollars spent acquiring website traffic. The case studies presented on Amadesa’s site show various levels of lift with effective revenue per visitor, checkout completions, free registration signups and visitor conversion, sometimes reaching an added value of $1 million a year.

Amadesa is headquartered in Chicago and has offices in New York and a development center in Ramat Gan, Israel.  The company offers both a self service solution and a managed relationship to clients mainly in the e-Commerce, Lead Generation, Dating and other subscription sites. Along with its investment, Carmel Ventures general partner Shlomo Dovrat will join Amadesa’s board. Read more at Globes.

I’m back in San Francisco after a successful trip to Seattle. While I process my notes from the Red Herring Global conference, I wanted to share some of this week’s headlines in the…

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