Onavo Investors Earn 10x Profit With Facebook Buyout; Founders Make $50 Million
Investors in Israeli app maker Onavo stand to earn 10-times their initial investment with Facebook’s $150 million acquisition of the mobile data compression company, Israel’s Globes business daily reported.
Co-founders CEO Guy Rosen and CTO Roi Tiger are expected to earn a combined $50 million from the sale.
Globes reported that the idea to sell the company to Facebook came from the founders, according to Onavo investor Magma Venture Partners managing partner Yahal Zilka. “The last thing we’ll do is go against the flow,” he told Globes.
As well as Onavo, Magma also owned a stake in navigation app Waze that Google Inc. bought for almost $1 billion in June. “Although Onavo is a different order of magnitude compared with Waze, but in terms of the entrepreneurs’ skills, they are no less talented,” Zilka said.
The concept for Onavo was born from Rosen’s frustration over the high costs of cellphone roaming fees, while at a conference in Barcelona. His solution was to compress the data to make it cost less to send, and he partnered with Tiger, who was an expert in mobile telephone engineering.
Previously, Rosen and Tiger both served in the Israel Defense Force’s Unit 8200.
As part of the deal, Facebook will also turn Onavo’s Ramat Gan office into the company’s first Israeli headquarters. Onavo employs 40 workers between offices in Ramat Gan and Palo Alto, near Facebook in Menlo Park.