Mobileye’s Amnon Shashua in Talks to Join Marius Nacht’s New Digital Banking Venture
12 August 2019 - calcalistech
Nacht, co-founder of cybersecurity company Check Point, submitted a request for a banking license and a business plan for establishing a digital bank in January
Amnon Shashua, the co-founder and CEO of automotive chipmaker Mobileye, is in advanced talks to join the new digital banking venture of Marius Nacht, co-founder of Check Point Software Technologies Ltd., according to one person familiar with the matter who spoke to Calcalist on condition of anonymity. The digital bank will be headed by Shuki Oren, previously the accountant general of the Israeli Ministry of Finance.
Shashua has already invested several million dollars in the venture, but is negotiating a much bigger investment of a few tens of millions of dollars and a joined control of the bank, the person said. His name was already passed on to the Bank of Israel, which is required to approve the new bank's controlling shareholders, the person said. The total investment in the bank is planned to be around $120 million, the person added.
Nacht's private capital is estimated at around $2 billion, including a remaining 4% stake in Check Point.
Shashua made a small investment below the reporting threshold, a representative told Calcalist. He is currently considering increasing the investment, but it will take a few months before a decision is made, the representative added.
Since Mobileye was acquired by Intel in 2017 for $15.3 billion, Shashua has not been reported to have made any significant investments. Shashua is also the co-founder of artificial vision device company OrCam Technologies Ltd., together with Mobileye co-founder Ziv Aviram.
Nacht submitted an official request for a banking license in January, as well as a business plan for establishing a digital bank. The request is still being processed by the Bank of Israel, which has yet to grant such a permit to any entity.
According to several people familiar with the matter who spoke to Calcalist on condition of anonymity, Shashua does not view the venture as just a financial investment, but is attracted to the innovation of a digital bank.
In August 2018, Israeli banking regulator Hedva Bar said that a fully digital bank could be a year away. While Bank Leumi already operates a digital arm, Pepper, estimates are that Nacht will receive approval only by the end of the year. A digital bank, an idea championed by finance minister Moshe Kahlon, is supposed to compete with Israel's five largest banks.
In the past, the Nacht group specified it will only work to establish a digital bank if the state will remove three main obstacles to competition: establishing regulations for deposit insurance; establishing an external body that will provide computer-related services to banks, intended to help banks cut down on expenses; and preventing predatory behavior from existing banks. The ministry has already published a tender for a service provider, but the first and third demands are considered contentious, especially the demand for deposit insurance regulation, which the ministry is actively opposing.
In the meanwhile, to encourage digital banking ventures, the Bank of Israel is working to promote open banking, intended to force the banks to share their databases of credit card users with new financial players, to enable the creation of engines that will help consumers compare the services offered by each bank.