Rhino Poachers in Israel – Globe

Biggest Rhinoceros Supporters in Israel Funds Leading the Group: Viola Ventures and Alf Ophir Dor Which Israeli Funds Are Best for Hunting Rhinoceros? The Globes survey examines who these Israeli venture capital funds are and which ones identified early-stage startups that would later become a multi-billion dollar unicorn. The survey covers more than 60 companies that became unicorns in private fundraising rounds, public offerings, or acquisitions in 2019-2022, and identifies Israeli funds that made early-stage investments (Seed Rounds, A, B). It certainly isn’t easy spotting a startup with unicorn potential early on in the game. A study published in 2015 by CB Insights reviewed the fate of 1,405 startups that had raised seed funding six years earlier. The study found that only 1.28% of those startups eventually became unicorns. Perhaps that ratio should be reconsidered in this current period of unprecedented inflation in tech company valuations, but even in boom times like these, only one of the dozens of startups raising seed funding will achieve coveted status. Searching for potential According to a Globus survey, two Israeli funds scored the highest in identifying Israeli rhinos: Viola Ventures and Aleph. The portfolios of these two funds include six startups that have reached valuations of more than $1 billion in the past two and a half years. It must be said that Alef achieved this figure in much less time than Viola Ventures. Viola is a long-term fund that was founded in 2000, while Aleph was established only in 2013. It is clear that early investing in start-ups that will later become unicorns requires a good look to identify potential that others are not seeing. Israeli high tech is full of stories about startups being rejected by fund after fund, until someone came along and grabbed the opportunity and reap the rewards later. monday.com co-founder Roy Mann said his startup failed to raise money from nearly every investor in Israel, even reaching Avi Eyal from Entrée Capital. Last month, monday.com went public on Wall Street for $6.8 billion. Determining potential, however, is not always the main issue. In many cases, especially when it comes to experienced entrepreneurs with successful track records, the important element is the ability to win the investment deal, outsmarting competing funds that are also seeking to funnel money into a venture with potential. Winning can result from a better financial offer, speed of response, as well as the ability to communicate with entrepreneurs and convince them of the added value that the fund can provide. The competition for deals, of course, is not only between Israeli funds, but also against foreign money. Previously, Israeli venture capital funds were known to have the advantage of early identification of startups thanks to proximity, but this has also changed, as foreign funds, many of which have offices in Israel with local partners, have begun investing in the initial project. Phase. Indeed, a review of investors in a series of successful Israeli startups reveals that, in many cases, Israeli money is almost completely absent from the list. For example, in the long list of SentinelOne investors, after last week’s massive $9 billion initial public offering, only one early Israeli investor (Upwest) was found. Start-up Gong, which raised $250 million in private funding at a record $7.2 billion last month, has no Israeli money at all on its investor list. Double-digit returns When an early stage investment, against all odds, becomes a rhino, the outcome can be very rewarding for a fund and yield double the return, even after dilutions along the way. Viola Ventures invested $20 million in IronSource and has now generated 50 times the return on the company’s $11.1 billion initial public offering. Viola, through her growth fund, has invested $75 million in a similar site, which went public recently. This investment was made at a later stage and at the end of the day yielded a much more modest 3x multiplier on the funds. (Since this is a later stage investment by Viola, it is not included in the current survey.) After Viola Ventures and Aleph, three Israeli chests occupy the next positions with four unicorn bulls each. The first is Pitango, one of the oldest funds in Israel, which was founded in 1993. In the case of Pitango, investing in one of its successes, ForeScout, goes way back. Another veteran fund with four wins to its credit is Vertex, which went live in 1997. All four Vertex unicorns are new and only earned their spot last year. The smallest fund to score four wins is Entree Capital, which only began operations in 2009 and was, as mentioned, the number one investor in monday.com. Two other funds that registered four times are Genesis Partners and Gemini Israel Ventures. However, these two are no longer active, and have sold a portion of their holdings to the Insight Partners Fund in the United States, and are therefore not included in the final arrangement. Both funds could reach five and six wins, as many of their investments are on the cusp of becoming multibillion-dollar public companies through SPAC mergers. In the case of Genesis, that’s chip company Valens and digital advertising company Innovid, and in Gemini’s case, robotic tech company Autotalks. After the leaders, with three victories each, there is an interesting group of funds that are either Israeli or have close ties to Israel. BRM Capital became famous when brothers Nir and Elie Barkat made an initial investment of $150,000 in Check Point Software Technologies Ltd. (Nasdaq: CHKP), an investment that will become particularly profitable over the years. BRM recently had three wins, thanks to investments in Moovit (which sold to Intel last year for about $1 billion), OrCam Amnon Shashua, and eToro, which are expected to go public soon through a massive SPAC merger. Group 11 and Zeev Ventures also scored three wins. These two funds were created by Israelis residing in the United States, Duffy Francis (from Group 11) and Oren Zeev. Often they both invest, one after the other, in the same companies. The Francis Group has invested 11 in another Israeli startup that became a unicorn, Eynat Guez’s Papaya Global, but since this investment was made after the B round, it is not included in our rating. Oren Zeev invested privately in Israeli-American rhinoceros, founded by Israelis Adi Tatarko and Alon Cohen, but since this investment was not made through the fund, it was not included in the rating. What is an Israeli company? One of the biggest difficulties in constructing this type of classification is defining what an Israeli company is. Group 11 and Zeev Ventures, among others, are investing in TripActions. Although the company was founded by Israeli entrepreneurs, its activities are based in the United States and did not have a local presence at all until recently. So we did not include them in the ranking. However, we decided to classify Sunbit, which is also an American company, due to the large local presence of its founders and the Israeli development center. Israeli money was involved in many unicorns whose domestic connection is remote. North (formerly Greylock Israel) invested in four Israeli unicorns according to our survey, but because it sold its holdings in two of them, IronSource and Payoneer, in 2019, and lost its current initial public offerings, it wasn’t included at the top of our final list. However, 83North only makes half of its investments, on average, in Israel, and the rest in Europe, where it has invested in a number of other unicorn companies, such as payment platform Marqeta, which went public this year for $15 billion. Other Israeli funds such as Entree Capital and Pitango have also invested in non-Israeli unicorns, some involving Israelis working abroad and others not related to Israel at all. Alef has also invested in WeWork, which was founded by Adam Neumann, but it also does not fit the definition of an Israeli company. The list does not include Israeli funds that specialize in later stage investments such as Qumra Capital, for example. Vintage Investment Partners also invests in a large number of Israeli unicorns, but mostly got in after the first rounds. Veteran JVP boxer Erel Margalit didn’t take the top spot either, as in total he scores just one win with the Israeli rhinoceros (Earnix). Most of the unicorns involved are still “on paper” – but not all. Over the past year, a record number of Israeli initial public offerings have taken place on Wall Street, allowing the funds to realize their holdings in Israeli unicorns at a profit. At the same time, Israeli funds such as YL Ventures and CyberStarts for various reasons decided to sell all their holdings after the companies became unicorns. In this way, the funds have taken advantage of the generous rates currently given to startups, in order to generate profits even before exits and public offerings. Israeli venture capital funds for veterans and beginners are divided into older funds belonging to the founding generation of Israeli high-tech funds, and smaller funds, born in the last decade after the growth and development of Israeli high-tech. The Globes survey highlights the role of veteran funds. Of the top five who identified unicorns, three are old (Viola, Vertex and Betango), and only two are newcomers (Alf and Entrée Capital). But this comparison is misleading, as veteran funds are still reaping some of the fruits of investments made many years ago. One notable example is Viola Ventures, where at least two of its now lucrative investments, Payoneer and Outbrain, were made in 2008 and 2009. Do veteran funds dominate the market today? If we only looked at the investments made in the past seven years – an acceptable amount of time for creating a unicorn – the list would have been a little different. Older funds like Viola and Bitango (with two wins each) will have weaker ratings, compared to smaller funds like TLV Partners for example – proving the conflict between new and old generations in the Israeli investment world. How does the arrangement work? The current ranking is based on a list of about 60 Israeli technology companies that have raised funding, floated, or were acquired for $1 billion or more during 2019-2021. The list was created based on data from the IVC Research Center, which analyzes publicly available information. The rating did not include companies that are expected to go public with valuations exceeding $1 billion, but the process has not yet been completed. Defining an Israeli technology company has always been deceptive, and we have only included those companies established by Israelis that have a significant presence in Israel. The funds examined in the current survey are Israeli funds or funds with a strong connection to Israel. Inactive funds that have not made new investments are not taken into account. The classification does not include foreign funds, even if they have offices in Israel with local partners. In order to adhere to the definition of “first find out”, only investments made in initial rounds, A and B, and not investments made in later stages were taken into account. Money invested in unicorns sold in the past was not taken into account. Aleph 6 unicorns: Honeybook, JoyTunes, Lemonade, Bringg, NextSilicon, Melio Founded: 2013 Capital under management: $550 million Partners: Michael Eisenberg, Aiden Shokat, Yael Elad, Aaron Rosenson, Tomer Diary Viola Ventures 6 unicorns: Payoneer, Outbrain, IronSource, Redis Labs, Verbit, Lightricks Founded: 2000 Capital under management: $1.5 billion Partners: Shlomo Dovrat, Avi Zeevi, Ronen Nir, Daniel Cohen, Omry Ben David, Zvika Orron Pitango 4 unicorns: AppsFlyer, Via Transportation, DriveNets and ForeScout Founded: 1993 Managed capital: $2.5 billion Partners: Chemi Peres, Rami Kalish, Eyal Niv, Ayal Itzkovitz, Isaac Hillel, Ittai Harel, Zev Binman, Aaron Mankovski, Guy Ezekiel, Yair Cassuto, Edit Muallem, Gad Huldai Vertex 4 unicorns: Verbit, Axonius, Innoviz, Own {backup} Founded: 1997 Managed capital: $1.2 billion Partners: Aviad Ariel, Emanuel Timor, Yanai Oron, David Heller, Tami Bronner, Ran Gartenberg, Yoram Oron Entrée Capital 4 unicorns : monday.com, Rapyd, Rhys Kivid, Founding Fund Fund: 2010 Managed Capital: $800 Million Partners: Aviad Eyal, Ran Ashitov, Eran Belsky, Adi Joses, Doron Denstein Posted by Globes, Israel Business News – en.globes.co.il – on July 18 , 2021 © Globes Publisher Itonut (1983) Ltd. 2021