Israeli start up Zapper Technologies planned merger with a privately-held U.S. company has failed. According to estimates, the stumbling block was opposition from major shareholder Jerusalem Venture Partners (JVP). TheMarker.com has learned that Zapper could close by the end of the year if attempts to sell the technology it has developed also fail.
An MOU was signed between Zapper and the U.S. company in July. Marc Goldberg, a partner in Reuters Venture Capital and a member of Zapper's board of directors, led the merger attempt between the two companies, both portfolio companies of Reuter's venture capital fund Greenhouse Fund.
According to estimates, Jerusalem-based JVP, the largest shareholder in Zapper, opposed the move primarily because the fund would like to return the $3-4 million in cash Zapper still has to investors. Most of the company's shareholders and founders were in favor of the merger.
Zapper now employs just five people, having laid-off 75 since the beginning of the year. Company shareholders are currently negotiating the sale of the company¿s technology, solutions for data storage and retrieval and knowledge management in corporations.
Other key shareholders in Zapper include Israeli venture funds AIG Orion, Giza and Finnish company Sonera. Zapper raised $14 million in September 2000 at a company value of $65 million, having already raised a $4 million seed round from JVP.
Zapper refused to comment on the reports. JVP's response has not yet been received.