Israel Cleantech Ventures Funds, located in Kfar Hayarok ("Green Village"), has closed its first fund at $75 million, above the $60 million target, and even then, it turned investors away.
Israel Cleantech Ventures was founded in 2006 and closed the first stage of the fund at $15 million in January 2007. It is run by three general partners in their mid to late 30s: Jack S. Levy, Glen I.A. Schwaber, and Meir Ukeles. The company also has four venture partners, all of whom are well-known in the industry: Arnon Goldfarb, the CEO of TMB Water, and a former VP at Israel Chemicals Ltd. (TASE: ICL) and director of IDE Technologies Ltd.; Israel Kroizer, the president of Luz II Ltd.; Eytan Levy, the co-founder of microbial fuel cell developer Emefcy Ltd. and AqWise - Wise Water Technologies Ltd. and Yigal Stav, formerly CEO of Netafim Ltd.
"Globes": Why keep investors outside? Why didn’t you continue raising capital?
Glen Schwaber: "We thought that $75 million was the right amount for the first fund in an emerging cleantech market like Israel.
Eytan Levy: "Raising more capital would result in too great a dispersal of companies to begin with. We felt that this would be a mistake at this stage.
What's your investment model?
Jack Levy: "The fund's investment time frame will be ten years, and it has actually been operating since January 2007, when we made the initial closing of $15 million. We currently have seven companies in our portfolio, with stakes ranging from up to 35%. We're usually the lead investor in a company's financing round, because we aim to be very active in it."
Glen Schwaber: "Our usual investment strategy is to acquire a large holding in an early-stage company, with a single investment ranging from a few hundred thousand dollars to $3-4 million. We keep substantial financial reserves in order to keep our holdings in the companies and avoid dilution, in order to support the companies down the road when they reach independence."
Israel Cleantech Ventures seven portfolio companies are sewage treatment solutions developer AqWise (11%); EmEfCy, whose technology will generate energy inherent in organic components in wastewater.; Metrolight Ltd., which develops energy saving street lighting; fuel cell developer CellEra Ltd., and is not disclosing its technology; Pythagoras Solar Ltd., which seeks to improve the energy conversion of photovoltaic cells, and is also reluctant to disclose its technology; Citrine Renewable Energy Ltd. (CRE), which converts the biogas generated by landfills, waste water treatment plants, and other sources of biological waste into high value natural gas for use in vehicles; and Shai Agassi's electric car venture Project Better Place.
Will you consider acquiring the controlling interest in your portfolio companies?
Eytan Levy: "We don’t want total control, so we don’t try to reach 51% ownership, but we want influence, which is why we usually strive to reach a substantial holding. We're affiliated with Israeli and international venture capital funds, and we're happy to collaborate. The general funds correctly consider us as a specialist cleantech fund, so they prefer to make joint investments with us."
Will you only invest in Israeli start-ups or also in foreign companies?
Meir Ukeles: "We believe the greatest opportunities are here in Israel. Our focus will be in Israel, although we might also invest in foreign companies with an Israel connection. The important thing for us is the existence of large markets for the technologies we invest in and the potential for an exit within four to seven years. We aim to be in the top 25% of funds with an internal rate of return (IRR) of 25% or higher."
Who are your investors?
Glen Schwaber: "Private investors, family offices, and Israeli and foreign institutional investors. Our largest investor is Dutch fund of funds Robeco, which is considered a leader in the field. Another big name is Piper Jaffray Inc. (NYSE: PJC), which also has a cleantech fund of funds. One of our private investors is Edgar Bronfman Sr."
Published by Globes [online], Israel business news - www.globes-online.com - on May 5, 2008
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