February 2019 - Monthly Insights Israeli Venture Capital
News and Updates
MAPPING THE ISRAELI VENTURE CAPITAL ECOSYSTEM
Over the past several years, and more recently with the launch of our dedicated venture arm, we have been an active fund investor in the Israeli venture capital ecosystem. As such, we have seen how the distribution of returns mirrors that of global venture capital, where the majority of historical returns have been concentrated among a small group of top-tier funds. This sort of distribution mandates that an investor in venture capital funds build strong access to the best performing funds in the market. The most basic pillar of good access lies in strong dealflow - i.e. the ability to be exposed to the most attractive investment opportunities in the market. Naturally, there are many other components of strong access, which we will cover in more detail in our next blog post, such as providing additional value to venture firms beyond just capital commitments. As a fund of funds, we constantly aim to build strong dealflow and be exposed to all of the funds which fall under our investment scope, which later allows us to partner with the best managers in the market.
As an Israeli-centric fund of funds, the depth of the market and therefore the strength of our dealflow, is a critical component of our success. Over the past several years we have seen the Israeli market continue to grow and scale, along with the number of active funds in the market. Today, Israel is home to more than 100 active venture capital funds, with local venture capital funds raising over $2.5 billion across 24 funds in 2018 alone. The landscape has evolved tremendously over the past few years as international VCs, corporate investors and private equity groups have all significantly increased their investments in Israel.
As the market continues to evolve and new sources of capital enter the market, we have received numerous requests from both entrepreneurs and investors in our network to share more information about the emerging players in the market. After contemplating what would be the best approach to sharing this information, we decided to map the different venture funds, with an emphasis on those that predominantly invest in Israeli-related companies. We are now happy to share our most up-to-date mapping of the Israeli venture capital ecosystem (please refer to Medium post for higher quality image of the mapping).
A few notes about our mapping: our mapping is mostly focused on financial investors and excludes Biotech and Life Science funds, corporate venture arms, angel investors and networks, incubators and accelerators. We split the mapping into two fund categories - "Local Funds" and "Foreign Funds". Local Funds include all funds (or private investment vehicles) which predominately invest in Israel-related startups regardless of the funds’ location. Foreign Funds includes all funds (or private investment vehicles) which are foreign-based and have a significant exposure to Israel-related startups, but only includes the most active funds falling under such a scope. All funds mapped were actively investing in new portfolio companies during 2017/8. This list is not exhaustive, and there may be funds which are not included in the mapping. If you think your fund was miscategorized or you have information about funds we may have left out, please reach out to us.
Notable Investment Rounds
Taranis, a Grove Ventures portfolio company, secured its series B funding of $30 millionfrom 83North, AWS, Samsung Ventures and current investors. Wiliot is a fabless semiconductor company providing passive SoC platforms for the IoT market.
Verbit, a Vertex Ventures portfolio company, secured its series A round of $25 million led by Viola Ventures. Verbit uses artificial and human intelligence to provide a smart transcription and captioning solution.
Bringg, an Aleph Venture Capital portfolio company, secured its series C funding for $25 million from Next47, Coca-Cola and Cambridge Capital. Bringg is a leading delivery logistics solution that enables enterprises to efficiently manage their complex delivery operations.
Amazon (NASDAQ:AMZN), acquired CloudEndure, a Magma Venture Partners portfolio company, the provider of a cloud migration and disaster recovery for any application, for $250 million.
Samsung Electronics, acquired Corephotonics, a Magma Venture Partners and Amiti Ventures portfolio company, the developer of a dual lens camera for smartphones, for $155 million.
Recommended Venture Capital Reads
Why the Midwest might have a different definition of venture capital than the rest of the US. [Clay & Milk]
Everybody can make podcasts. Can anybody make them profitable? [Bloomberg]
When an IPO is looming, startups often put two different price tags on their shares at the same time: a heady valuation for sales to outside investors and a much lower one for insiders. [The Wall Street Journal]
As funds keep getting bigger and bigger, it's getting more and more expensive for PE managers to have skin in the game. [Institutional Investor]
A visit to the desert outside Las Vegas to check in with Virgin Hyperloop One, the Richard Branson-backed startup hoping to shape the future of transportation. [The New York Times]