Radware (Nasdaq: RDWR; TASE: RDWR) signed a $15 million check only two weeks ago for acquiring Vsecure Technologies from its chairman and CEO, Izhar Shay. Now sources inform "Globes" that Shay has already been tapped to manage the Israeli activity of US venture capital fund Canaan Partners, which is opening an office here.
Canaan Partners manages $2.2 billion in seven funds. The fund raised $450 million in its most recent financing round, completed several months ago. It has invested in 225 companies, of which 46 have reached the primary market, and 55 have merged with other companies or been acquired.
Figures from the Israel Venture Capital (IVC) Research Center indicate that Canaan Partners has made only three investments in Israel to date. The first was in Mobilitec, which develops a platform for content transmission and solutions management for communications providers; the second was in UltraGuide, which closed down two years ago; and the third was in Business Layers, sold to Netegrity (Nasdaq: NETE) for $42.5 million in cash and shares. The connection between Shay and Canaan Partners started at Business Layers. The fund invested in three of the company’s four financing rounds, and owned 20% of it when Netegrity acquired it.
Canaan Partners’ entry into Israel is part of a new strategy of opening offices outside the US. Shay, who will be a venture partner in Canaan, will open the first such office in Herzliya, and an office in India is expected to follow.
”We plan to invest in IT, software, security, networking, cellular, Internet, and life sciences in Israel,” Shay says. “I’m personally experienced in security and software. Canaan has the vast accumulated experience of nine partners. We regard ourselves as catalysts -- as a fund that can actively help companies with a lot of experience.”
Shay says that Canaan will prefer investing in companies that raise their initial capital from institutions. “Our strategy will be to work with Israeli funds, not to compete with them. 99% of the venture capital people in Israel will agree with me that the right model for companies raising money from funds is a combination of Israeli investors and US funds that can open the door to the US market,” he explains.
Shay notes that Canaan wants to make five investments in Israel over the next 12-18 months, and adds that candidates for investment already exist.
Published by Globes [online] - www.globes.co.il - on December 15, 2005