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Top Israeli investor visits San Diego

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In late August, Qualcomm Inc. scooped up Israeli chip manufacturer DesignArt Networks for more than $150 million.

DesignArt Networks is just one of many Israeli-rooted startups that U.S. tech giants like San Diego-based Qualcomm (Nasdaq: QCOM) are after.

"DesignArt and its products will both enhance and accelerate our initiatives to drive increased capacity and coverage in mobile networks," said Craig Barratt, president of Qualcomm Atheros, at the time of the acquisition.

Jon Medved, a top venture capitalist in Israel and serial entrepreneur, paid a visit to local universities on Monday to discuss Israel's innovation boom.

Medved, who has 14 startups tucked into his personal angel investor portfolio, addressed sold-out crowds at University of California, San Diego's Rady School of Management and San Diego State University's business school Monday.

Stand With Us hosted Medved in San Diego as part of its Israel Start Up Nation Series.

Medved has local ties to the region; he was born at San Diego Sharp Memorial Hospital.

“It’s fun for me to come back after being so long away and share what is going on in the Israeli community,” he said.

According to The Washington Post, Medved is “one of Israel’s leading high-tech venture capitalists,” and The New York Times named Medved as one of the top 10 most influential Americans who have impacted Israel.

The goal of his San Diego visit is to spread the word about investing and acquisition opportunities in Israel.

In 2011, Israeli high-tech companies raised $2.14 billion, up 70 percent from 2010, according to the IVC Research Center. Most of that money (75 percent) flowed in from overseas funds last year.

“People don’t realize how much of an impact it has on the U.S. economy and growth,” Medved said. “We’ve been hitting the ball out of the park in terms of high-tech."

Like Qualcomm, Cisco Systems Inc. (Nasdaq: CSCO), Broadcom Corp. (Nasdaq: BRCM) and Microsoft Corp. (Nasdaq: MSFT) have bought Israeli-based startups.

In 2009, there were 63 mergers and acquisitions of Israeli high-tech companies, according to the center. In 2011, the average deal size was $60 million, up from $32.5 million in 2010.

In addition, companies like Google Inc. (Nasdaq: GOOG) and IBM (NYSE: IBM) have established research and development centers in Israel over the years.

“So you basically have this influx of huge corporations who are taking advantage of Israel’s technology manpower,” Medved said. “Around the world people are relying on Israel to create the next big thing for their product.”

The face recognition technology behind Microsoft’s Kinect game player was developed in Israel, for example.

The impact of Israel on the U.S. economy is already being studied in other regions.

There are 100 companies with Israeli founders or Israeli-licensed technologies in Massachusetts, according to an independent 2010 study by Stax Inc.

In 2009, those companies and the firms that service them generated $7.8 billion in total revenue in the state, supporting 21,000 jobs.

“If you look at what is going on in California, you will see similar numbers,” Medved said. “There are large amounts of activity, especially in biotech and life sciences, defense and electronics.”

He hopes a similar study will be conducted in California to track Israel's influence on local economies.

“I hope they encourage people, as a result of my visit, to study the impact,” he said. “It’s fun to tell stories, but data speaks louder than words.”

While job figures in the expected areas like Silicon Valley are “obvious,” he said there are “funky places” like Vermont that have surprising economic links to Israel.

“Michigan and Ohio — all kinds of unlikely places where Israeli innovation is playing a role,” he said.

Industries run the gamut, including semiconductors, life sciences, software, security and Internet.

In addition, there’s “tremendous” activity in clean tech and water technology, he said.

“Hundreds of Israeli startups are working on water recycling, desalination and reverse osmosis," he said.

As a venture and angel investor over the past two decades, he invested in almost 100 Israeli startup companies, helping a dozen to reach values in excess of $100 million.

Medved co-founded Vringo, a mobile social applications company that went public in June 2010.

His latest endeavor is called OurCrowd, which gets investors all around the world to dump money into Israeli startups.

This week, at a project launch event in Israel, Qualcomm's Wireless Reach program announced the development of an eye-free mobile device for the blind.

Alongside Project RAY Ltd., which designs accessibility tools for blind and visually impaired people, Qualcomm developed a smartphone that is synchronized with Israel’s Central Library for the Blind, Visually Impaired and Handicapped audio books content.

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