Meron Capital announced today the closing of Meron II, its second $50 million fund to invest in early-stage deep-technology software startups led by Israeli entrepreneurs. The new fund will target 18-20 pre-seed and seed investments in startups that are building software-based solutions for enterprise, cybersecurity, digital health, fintech, DevOps and more.

Follow Israel Hayom on Facebook and Twitter

Meron Capital launched its inaugural fund in 2017 and has invested in 16 startups to date. Four have already made successful exits: AIOps startup Loom Systems was acquired by ServiceNow; API integration platform Reshuffle was acquired by Twitter; digital health company Clear Genetics was purchased by Invitae; and IoT startup Axonize was acquired by Planon.

In addition, 10 more have so far raised further financing with startups Immunai, Solugen and Armory alone disclosing combined investments in excess of $300 million to date.

"We see ourselves as a startup investing in startups – we are creative, scrappy and move fast," said Liron Azrielant, Managing Partner at Meron. "We share the same spirit as our founders and that's why we founded our own firm and chose to face the challenges of being an emergent in a market of incumbents."

Azrielant, who served in the IDF's elite technological Unit 8200 and then earned a BA in math and physics at the Hebrew University of Jerusalem, then went on to MIT, where she was the youngest-ever applicant accepted to the school's LGO dual-degree program, where she completed an MBA as well as an MA in computer science and electrical engineering.

She started her career as a software engineer but then moved over to the business side as a consultant, advisor and then investor at Bain, PwC and finally, Blumberg Capital. After leaving Blumberg In 2017, she and Daniel Roditi launched Meron Capital. Azrielant also manages the Young Venture Capital Forum, an education non-profit connecting over 250 young VC professionals from all firms in Israel.

Roditi was born and raised in Switzerland and started his career in finance and banking before joining a commodity trading software startup as one of the first employees. He came to Israel in 2015 to pursue an MBA at Tel Aviv University, and joined Blumberg Capital as part of their Tel Aviv-based investment team. He and Azrielant left together to build Meron Capital. At 29, he is the youngest venture capitalist in Israel to found his own fund.

In the current Israeli climate of record-breaking fundraising and exits, the Meron Capital team works with talented founders, helping them ideate their early conceptions and build out their teams.

"We don't necessarily expect our founders to be in a position yet to sell us on their idea. We will take a bet on their team, and work with them to crystallize their idea and help them approach customers, prospective employees, and later stage VC firms," explained Roditi.

What are Azrielant and Roditi looking for in startup founders? "Our typical founders are either tech superstars or an established expert in their space," says Azrielant, while Roditi adds, "The most important quality is tremendous resilience and fortitude. You have to be able to push back against negative or distracting feedback but at the same time, be perceptive and pick up on subtle criticism by experts who might be sugarcoating their true thoughts."

Meron II has already invested in four companies: LendAI, operating in the market of mortgage lending, where Meron was joined by Israel's third-largest bank; Sorbet, the first PTO clearinghouse, in a deal they closed together with Viola; Firmbase, a fintech startup in which top angels have invested; and Laminar, the first data protection platform for cloud-native applications, where they invested alongside TLV Partners and Insight Partners.

Subscribe to Israel Hayom's daily newsletter and never miss our top stories!

The post 'We are creative, scrappy, and move fast,' say young heads of Israeli VC fund appeared first on www.israelhayom.com.

Israel's high tech sector continues to smash records, with tech startups raising a record $10 billion from January-May 2021.

Follow Israel Hayom on Facebook and Twitter

According to Nimrod Cohen, founding partner at TAU Ventures, which invests in Israeli high tech companies: "This past year, we've seen an explosion in terms of fundraising, both in terms of amounts and in terms of worth. Some might say that this is a bubble, but on the other hand, I think that the process that has taken place in the world this past year, which was accelerated by COVID, is mainly one of realizing that technology is everywhere and critical to every industry."

Cohen says that "We, our children, and our parents handle technology from the moment we wake up in the morning until we go to sleep. I assume that this realization, combined with low interest rates and a lack of investment alternatives, is part of the reason we are seeing an increased influx of funds. Like with every trend, some will ride this one and benefit from it unjustifiably, but I believe that it will straighten out in the end."

Startup fundraising in the first half of 2021 included 28 rounds by unicorns – startups valued at $1 billion or more. A total of 30 rounds comprised $100 million or more, what are known as "mega-rounds." In total, these mega-rounds made up over $5 billion of all money raised. The high tech sub-sectors that raised the most money were cyber, fintech, and organizational programs.

Mega-rounds have become almost routine. In January 2021, OwnBackup, which develops cloud-based backup and restoration solutions, announced that it had completed a round totaling $167.5 million, bringing its valuation to $1.4 billion.

Other Israeli high tech firms reported closing massive rounds in the space of 72 hours, such as Orca Security, which in three days raised $210 million, pushing its valuation to $1.2 billion – all a mere two years after it was founded.

Another aspect of fundraising that has broken records were fundraising rounds held more closely together than in the past. Whereas it used to be customary to wait two to three years between rounds, Israeli high tech companies are now closing multiple rounds in a single year. An example of one such company is Salt Security, which held three rounds in under a year, bringing in $120 million -- $70 million in the most recent alone.

Salt Security CEO Roey Eliyahu, the company had not planned to hold additional rounds, but agreed to because it saw the investors as potential strategic partners for the future.

Dekel Persi, co-founder and managing partner at TPY Capital, said that the Israeli high tech sector was undergoing "accelerated growth," which translated to companies and ventures being able to grow into giant companies rather than being acquired for a few tens or even hundreds of millions of dollars.

"Part of that accelerated growth of course has to do with COVID, and continued low interest rates in the world, which is creating demand to invest in the tech sector," Persi added.

Subscribe to Israel Hayom's daily newsletter and never miss our top stories!

However, caution is needed, warned Lee Moser, managing partner of AnD Ventures.

"This past year has accelerated processes in the world of investment in high tech in general and Israeli high tech in particular. But this flood of money is causing some startup companies to grow too fast and skip important steps in building a stable company. Entrepreneurs are finding themselves with double the amount they wanted to raise, with investors who aren't necessarily a good fit strategically … Surplus money in the markets mustn't be allowed to cause entrepreneurs to lose focus on building stable companies, starting from the critical first steps to continuing to grow and joining up with the right investors for them," Moser said.

Gilad Zwick contributed to this report.

The post Israeli high tech startups raise record-breaking $10B appeared first on www.israelhayom.com.

Israeli venture capital firm Glilot Capital Partners has been ranked the leading global fund by the Prequin research firm for the fifth year running, the company announced this week.

Follow Israel Hayom on Facebook and Twitter

To date, Glilot Capital Partners has produced 10 exits and an 84% return to investors.

Glilot Capital was established a decade ago by Kobi Samboursky and Arik Kleinstein, who both serve as managing partners. Nofar Amikam later joined them as a partner.

Following its initial success, Glilot Capital launched four additional funds that now manage $500 million worth of investments. The company's latest fund, Glilot+, is in the early stages of investing in 15 early-stage software and cyber companies. Launched at the start of 2021, Glilot+ is under the management of Lior Litwak.

Samboursky said that Glilot Capital Partners was "proud" to have been ranked the leading gloal fund by Prequin.

"This is an award not just for us, but primarily for the entrepreneurs who continue to establish here leading companies on a global level," Samboursky said.

Subscribe to Israel Hayom's daily newsletter and never miss our top stories!

The post Israel's Glilot Capital Partners named leading global VC fund appeared first on www.israelhayom.com.

VentureIsrael announced on Wednesday the launch of a new venture capital fund, which will invest in Israel based, early-stage deep-tech start-ups. The fund's investment strategy focuses on companies with clear-cut technological advantages, an experienced management team and a flexible business strategy.

The fund's first investments are a secure quantum communications system, an AI (Artificial Intelligence) market research solution and a next-generation correspondent banking platform.

Follow Israel Hayom on Facebook and Twitter

VentureIsrael is managed by five partners – all investment experts with diverse backgrounds: Michael Harte, former COO of Santander UK and Barclays; Roman Gold, Gadi Isaev and Alexander Zarankin of JSCapital, the Israeli investment platform; and Igor Turkin of Investment Management Group.

"The Israeli innovation industry is demonstrating phenomenal growth potential even given the current turbulent economic environment," said Gold.

"In the first half of 2020, Israeli start-ups attracted a record of $5.25 billion investment capital, while the total amount of exits approached $7 billion. We also see that the demand for early-stage capital is growing faster than the amount of the funding available – therefore our aim is to find the right place in that niche of the market."

"Being a part of the Israeli start-up ecosystem and having closed a large number of successful investment deals, we have consistently observed the importance of a clear technological advantage in a company's ability to stand out from the competition. That's the reason our fund's investment strategy will focus on deep-tech companies," said Isaev.

VentureIsrael will also pay close attention to the Enterprise Software segment of Israeli early-stage start-ups.

"Worldwide, we see in increasing corporate demand for digital transformation. The Israeli market has long established itself as an influential and effective provider of innovative solutions for the corporate segment and our fund will seek out the best opportunities in that field," said Turkin.

VentureIsrael's initial closing has attracted substantial attention from private and institutional investors globally. The fund headquarters are based in Tel Aviv, with an international subsidiary in London.

Subscribe to Israel Hayom's daily newsletter and never miss our top stories!

The post The focus of a new Israeli VC fund? Deep-tech appeared first on www.israelhayom.com.

OurCrowd said the former attorney for Donald Trump will be acting as a partner responsible for "building ties with the Middle East region."

Follow Israel Hayom on Facebook and Twitter

Greenblatt was the architect of Trump's recently unveiled Mideast plan that largely favored Israel. He worked as the White House's special representative for international negotiations until resigning in October 2019.

Greenblatt told The Associated Press his focus would be on cultivating investment from Saudi Arabia, the United Arab Emirates, Qatar and Bahrain – all countries that have developed behind-the-scenes relations with Israel in recent years, and who were to be key investors in the economic development side of the Trump administration's Mideast plan.

"I'm hoping to be able to utilize the platform that I have and connect Israel and the Gulf in a way to continue the momentum that we've seen over the last three years," Greenblatt said. "They work together on security to a degree. And, you know, there's enough commerce going on in a small way that leads me to believe we're going to see a bigger impact."

OurCrowd is an Israeli platform that allows affluent individuals to invest smaller sums in start-ups that are pooled together with other smaller investors, akin to crowdfunding for venture capital. Since its launch in 2013, the company says it has raised $1.4 billion in assets for 200 companies and 20 funds, most of them Israeli.

OurCrowd's founder Jon Medved said in a statement that he expects Greenblatt's addition "to open up a new world of opportunities for our growing portfolio of 200+ companies and 20 funds."

Greenblatt spoke at OurCrowd's annual conference in Jerusalem earlier this month. OurCrowd said its February 2020 summit included participants from around the Arab world.

Greenblatt said he would be based out of New York, but his job "will undoubtedly involve a great deal of travel to the region."

Trump unveiled his long-awaited "deal of the century" last month in Washington. It sided with Israel on most of the conflict's main sticking points, and the Palestinians rejected it outright.

The plan grants Israel sovereignty over large parts of the West Bank, and falls far short of the Palestinian dream of an independent state. Instead, it calls for giving them limited autonomy over disjointed stretches of land, and only if they meet a stringent set of demands.

Greenblatt said that peace between Israel and the Palestinians and the broader Arab world "have always gone hand-in-hand, but they're not necessarily always going to go hand in hand."

"If the Palestinians don't engage on President Trump's peace vision, I still think we're going to see movement between Israel and the region," he said.

The post Former US Mideast envoy Greenblatt joins Israeli VC firm appeared first on www.israelhayom.com.

Based on press releases from Israeli companies that have completed financing rounds, more than $1 billion was raised in September alone.

Follow Israel Hayom on Facebook and Twitter

However, the true figure is likely even higher, as some companies do not reveal investment data, according to the report.

Israeli tech companies raised $650 million in July and $350 million in August, according to the IVC Research Center.

In September, credit company Fundbox raised $326 million, fintech firm Tipalti raised $76 million and open security platform Snyk raised $70 million. In addition, drone defense company D-Fend raised $28 million, and 3D-printing company Xjet raised $45 million.

Reprinted with permission from JNS.org.

The post Israeli startups raise more than $1 billion in September appeared first on www.israelhayom.com.

Now his firm has burgeoned into a $650 million behemoth.

Medved has gathered more than 20,000 investors from over 100 countries, taken stakes in dozens of cutting-edge startups, and watched 18 of his portfolio companies enjoy "exits" through public offerings on global stock markets or acquisitions by tech giants. An estimated 10,000 investors and entrepreneurs from around the globe descended on Jerusalem on Thursday for OurCrowd's gala birthday bash and investor conference.

But as the firm marks its anniversary, questions remain about whether its creative approach is wise for small investors.

While traditional venture funds seek investors such as billionaires, university endowments and pension funds to put down millions of dollars at a time, OurCrowd allows individuals to invest in selected companies for a minimum of $10,000, or enter their funds with investments as low as $50,000. OurCrowd pools these investments and takes stakes in startups on behalf of its clients.

Realizing the risky nature of venture investing, OurCrowd's clients must meet local regulations. American clients, for example, must have $1 million in assets.

Still, these clients are a far cry from the traditional venture capital crowd.

"We can democratize to an extent," Medved said.

He said clients can either choose individual companies, in the hope they will be part of Israel's next big thing, or "you could actually get into a venture capital fund, but you don't have to be a billionaire to do so."

Medved, a seasoned businessman who founded and funded several Israeli startups and previously managed one of the country's largest venture capital firms, called OurCrowd a "hybrid" between crowdfunding and traditional venture capital.

Unlike other many equity crowdfunding platforms, in which people invest directly into companies, OurCrowd vets the companies and provides clients with investment guidance.

In just five years, OurCrowd has made a splash in Israel's venture capital scene. It holds stakes in many of the country's most promising startups, such as Consumer Physics, developers of an optical spectrometer, alongside more established firms such as Freightos, a shipping logistics company, and defense contractor mPrest.

Since its launch in 2013, the company says it has raised $650 million in assets for 145 startups and 12 funds, ranging from health care technology to artificial intelligence. The bulk of the startups are Israeli.

"I think it's fair to say that OurCrowd has opened it [the venture capital world] up to retail investors in a way that it was never was open to retail before," said Michael Eisenberg, a partner at Tel Aviv-based venture capital fund Aleph.

"Otherwise, I would say it is close to impossible for a retail investor to get into almost any venture capital deal without something like an OurCrowd," he said.

Experts caution that venture capital remains very risky, with low success rates and slim payouts in many cases. Venture capitalists emphasize that most of the profits derive from a tiny percentage of investments.

Medved acknowledged that the Hebrew term for venture investing translates as "danger capital" and recommended that investors enter diversified funds, instead of individual startups.

"The reality is, if you don't take a basket, you're unlikely to get that one towering winner because usually [only] one out of 10 will really hit," he said.

Over the past two decades, Israel has developed into one of the world's most fertile grounds for venture capital firms. It is home to a bustling startup scene, fueled by an entrepreneurial spirit and the successes of graduates from secretive high-tech military units.

Israel has produced a series of high-profile successes over the years, including Check Point Software Technologies, a cybersecurity company that trades on the Nasdaq, mobile navigation app Waze, which was acquired by Google for about $1 billion, and Mobileye, which produces technology for self-driving cars and was gobbled up by Intel last year for $15 billion.

Of OurCrowd's 145 portfolio companies, 18 have made profitable exits. Yet according to OurCrowd, the return on investment on these exits has been a modest 30 percent. Six companies have flopped.

"If they can secure some of the top entrepreneurs and startups within the ecosystem in Tel Aviv and its surroundings, then that makes sense," said Christian Catalini, an economist at MIT who studies the venture capital world. "But otherwise you're taking a lot of risks because it's extremely early-stage, and at the end of the day they of course do a lot of due diligence, but you're relying on their process."

OurCrowd declined to provide a full breakdown of its investors but said it has drawn huge sums from North America, and, increasingly, Asia. It even counts investors from Muslim countries that do not have diplomatic ties with Israel, including Algeria, Bahrain, Indonesia, Kuwait, Morocco, Pakistan, Qatar, Saudi Arabia and the United Arab Emirates.

Marianna Shapira, a researcher at the Israel Venture Capital Research Center, said equity crowdfunding firms, foremost among them OurCrowd, are meeting a growing need in the Israeli tech market for early-stage investment.

As more Israeli companies reach maturity, venture capital firms are focusing their financing on growth, leaving "a void in earlier development stages," she said. Equity crowdfunding platforms have stepped up by "answering this financing demand, mostly because of their natural tendency to invest smaller amounts per round."

For the time being, investing in the next tech phenomenon through platforms such as OurCrowd remains out of reach for all but the very wealthy, though Medved envisions a future in which the less affluent can get in on the ground floor.

"Over time, we hope we can become much more democratic and allow ways to broaden this out so that schoolteachers and bus drivers and students can invest," Medved said.

The post Israeli firm sweeps venture world with crowdfunding approach appeared first on www.israelhayom.com.