The pan-European venture capital fund Index Ventures, is planning to boost its investments in Israeli hi-tech companies in the near future. Index Ventures partner Bernard Dalle told "Globes" in an exclusive interview.
Dalle said that the fund would not declare a certain sum earmarked for investment in Israeli hi-tech. However he did say, "We would be happy if 20-25% of the total amount of the fund were invested over the years in companies in Israel. We will not commit to a number of investments but we will certainly be happy if we can make 2-3 investments in Israeli companies each year."
Dalle's statements have already been translated into action, as Index Ventures has made several deals this year. In the last two months, it joined the large financing round for Zend Technologies, it collaborated with venture capital fund Venrock Associates in its investment in B-Hive Networks Inc., and joined Genesis Partners in the first financing round for Serendipity Technologies Inc.
Index Ventures, a European based fund investing in European companies, has invested in Israel in the past. Dalle says that Index Ventures maintains good contacts with funds and entrepreneurs in Israel. The fund invested in LaserComm in 2000, when the company had seemed promising; however, it eventually ceased operations in 2002. In 2003, Index Ventures again invested in Israeli companies, like VCON Telecommunications (acquired by Emblaze (LSE: BLZ), FilesX Inc. and B-Hive Networks, Zend Technologies and most recently, Serendipity Technologies.
One of Index Ventures' recent investments, which certainly pleased its investors, was Skype. Skype was sold last year to EBay for $4 billion, a handsome amount considering that Index Ventures, together with Draper Fisher, invested $18 million.
Dalle joined Index Ventures as a partner in 1997 and he focuses on deals in infrastructure, and implementation and services to organizations. Dalle manages Index Ventures investments in Israel. He was formerly a senior executive at McKinsey & Company and at Procter and Gamble, where he was responsible for ERP related projects.
The fund is investing from its third fund. Della says: "This is actually the fourth fund, since the first fund we raised was a small one and was considered a pilot. The current fund raised $400 million one year ago. If in the past we would invest opportunistically in Israel, this time we received a full mandate from investors to invest in Israeli companies. This fund is by definition intended for investments in European and Israeli companies."
Will you invest alone, or together with Israeli venture capital funds?
"In the past we always partnered, whether with an Israeli fund or a fund like Venrock, with an office and a partner in Israel. We believe that the investors have to be close to the companies. It is difficult to manage an investment from far away. Since we do not intend to open an office in Israel, I assume that we will continue to invest this way. Also, if entrepreneurs come to us and say that they could not find a professional venture capital fund to invest in them, I know that something is not right. We are familiar with the venture capital funds in Israel and we know that this is a mature and sophisticated industry."
What are you looking for in Israel?
"We invest in Information Technology and life sciences companies in the broadest sense of the term. We seek teams who are trying in a special way to solve a real problem in the market which they are targeting. We don't believe in finding customers and changing their behavior. We like companies which target large markets and intend to take them by storm."
How involved are you in companies after the investment?
"We usually sit on the board of directors, but our involvement and contribution is between meetings. We are involved in the selection of company executives, and assistance in business development and strategy, but we don't manage the companies. We like teams that want to manage the companies they created by themselves."
Published by Globes [online], Israel business news - www.globes.co.il - on September 14, 2006
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