Start-ups

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The FCA seeks industry feedback to capitalise on global regulatory sandbox trend.

By Stuart Davis and Charlotte Collins

The regulatory sandbox was pioneered by the Financial Conduct Authority (FCA) back in November 2015 — a “safe space” in which businesses can test innovative products, services, business models, and delivery mechanisms without immediately incurring all the normal regulatory consequences of engaging in the activity in question.

The sandbox has been a success to date, helping both existing and new businesses to develop and launch innovative products and business models (see Latham’s previous blog post on the success of the first round of sandbox participants, and Client Alert that tracks the use of the sandbox model across the globe).

By Charles Ruck

The exit outlook for Israeli M&A is especially positive, particularly in light of the ever-growing interest from the Far East. While the vast majority of inbound capital still comes from the US, China has emerged as a prolific investor in Israeli start-up and tech businesses.

Shanghai Giant Network Technology’s $4.4bn acquisition of Playtika, the social and mobile games business sold by Caesars Interactive Entertainment (CIE), is a marquee example of the increasing flow of capital coming from the East – Latham & Watkins advised CIE. Other investments have been equally eye-catching. At the end of 2014, Chinese search engine Baidu invested $3m into Pixellot, the Israeli sports video start-up. Baidu also provided financing to Carmel Ventures, the Israeli venture capital firm.

With a greater variety of foreign investors and acquirers hunting for high-quality Israeli assets, we can expect Israeli targets to achieve higher valuations.

By Tad Freese

Silicon Valley trends are often soon felt in its Israel equivalent Silicon Wadi. The two start-up ecosystems are intrinsically linked. In April this year, the connection between the two regions was further tightened when United Airlines launched a new direct flight between Tel Aviv and San Francisco.

New flight routes are demand driven and Silicon Valley and Bay Area businesses and investors have a history of buying up and buying into flourishing Israeli start-ups in Israel. Equally, Israelis have become part of the start-up and tech fabric in the Bay Area.