Viber, a smartphone app with Israeli roots that allows free online calls and messages, has been acquired for $900 million by Japan's Rakuten company, one of the world's leading Internet service companies.
Viber is registered in Cyprus and Las Vegas, not in Israel, but is run by Israeli entrepreneur Talmon Marco and partners Igor Magazinik, Sunny Marueli and Ofer Samocha. The company, which runs a small research and development center in Israel, is owned by the Shabtai family (55.2 percent), ISR West (12.5%) and the Marco family (11.4%). The rest is held by the employees.
The Viber app enables free voice calls and text messaging and has over 300 million users in 193 countries. Like WhatsApp, it has users across the world, enabling Rakuten to expand its platform outside Japan and fulfill its dream to become the largest Internet service company in the world.
Viber is not a profitable company: In 2013, it managed to make $1.52 million, while recording $29.51 million in losses.
"Rakuten is one of the most important Internet service companies in the world, which presents an amazing opportunity for Viber to accelerate our user base in new and existing markets," Marco said. Investment banking firm Goldman Sachs represented Viber throughout the negotiations with Rakuten.
Unlike the Waze acquisition deal, in which the Israeli traffic app was sold to Google for $1 billion, Viber's "exit" will not reap as much tax revenue for Israel. Because the company was established in Cyprus, Israel might not see the kind of profit it has seen in previous "classic" transactions.
The startup said the company's shareholders in Israel would pay taxes on profits from the deal according to the law and that all company employees would be recompensed from the sale. The R&D center in Israel will remain operating in its current capacity.
Viber was founded in February 2010. It has 120 employees, 40 of them in Israel. Rakuten's acquisition of Viber is expected to be completed by the end of March.