Sofinnova Ventures setting up fund for Israeli start ups

Sofinnova partner Eric Benhamou led a delegation to Israel to persuade institutions to invest in the $200 million fund.

Even as the capital available for investment by Israeli venture capital funds shrinks, more US firms are showing renewed interest in Israeli companies. Sources inform ''Globes'' that Sofinnova Ventures is raising a new $200 million fund to invest in US and Israeli start-ups. Company representatives visited Israel last week and met with Israeli investment institutions to persuade them to invest.

Sofinnova partner Eric Benhamou is a Silicon Valley veteran and world-famous serial entrepreneur and archangel investor. He visited Israel with the Sofinnova representatives to try and raise capital. He has invested in many Israeli companies, and he will lead the firm's investments in Israeli companies after the fund is raised.

In contrast to Israeli venture capital firms, which are struggling to raise follow-on funds, Sofinnova is unlikely to have any problems raising capital, and it will probably secure the financing within a few months.

Benhamou declined to comment on the report.

Sofinnova is a veteran Silicon Valley firm, founded in 1974. It manages $1.25 billion in assets, and invests in IT and life sciences companies. Last month, it raised a $440 million fund that will invest in US life sciences companies. The firm has a French affiliate, Sofinnova Partners.

Sofinnova Ventures has made one Israeli investment to date: ConteXtream Inc., which is developing cloud-based network virtualization framework for carriers, cloud service providers, and private cloud operators. Benhamou also invested in the company through Benhamou Global Ventures

Sofinnova apparently now wants to change its strategy and invest directly in Israeli start-ups. The new fund will apparently not invest in life sciences companies, but only in IT, communications, mobile, software, and digital media companies.

In the 1980s, Benhamou co-founded Bridge Communications, which was merged with 3Com Corporation, where he subsequently served as chairman and CEO until it was sold to Hewlett Packard Co. (NYSE:HPQ) in April 2010. He simultaneously served as CEO and later as chairman of Palm Inc. in 1999-2007. He currently serves as chairman of Cypress Semiconductor Corporation (NYSE: CY) and is a director at Israeli start-up Real Networks Inc.

Benhamou founded Benhamou Global Ventures in 2004 with a $25 million private investment. It has invested in eight Israeli companies to date. Its successful exits include the $100 million acquisition of Atrica by Nokia Corporation (NYSE; LSE; HEX: NOK), the $10 million acquisition of Mytopia by 888 Holding plc (LSE:888), the $218 million acquisition of Voltaire by Mellanox Technologies Ltd. (Nasdaq:MLNX; TASE:MLNX); the $40 million acquisition of Finjan by M86 Security Ltd.; and the $24 million acquisition of Go Networks by NextWave Inc., an early Sofinnova investment.

Benhamou Global Ventures' current portfolio companies include 4G network solutions developer PureWave Networks Ltd., My6Sense Inc., Real Networks, and ConteXtream.

Published by Globes [online], Israel business news - - on November 7, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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