Israeli technology investment firm Viola is in negotiations to set up a new fund in partnership with Chinese sovereign wealth fund China Investment Corporation (CIC). The fund, if it materializes, will be managed by Harel Beit-On, founder and general partner at Viola Growth, but it will be separate from Viola's existing funds. Viola declined to comment on the report.
CIC has in the past invested in funds of Israeli venture capital firm Pitango, but the current negotiations appear to concern a more strategic move, similar to other investments that CIC has made around the world. In the US, for example, CIC set up a joint venture with investment bank Goldman Sachs to invest billions of dollars in US manufacturing. The current move will include the raising of a fund to invest in Israeli startups. CIC held meetings with several Israel investment firms, and decided to continue the process with Viola. The joint fund will naturally assist Israeli companies in entering the Chinese market, something that will presumably affect the areas in which the new fund will invest.
In the past year, because of the trade war between China and the US, startup companies have thought long and hard about whether to raise money from Chinese investors and whether to sell to Chinese customers. To some degree, startups have to choose between the US and China, because of tighter US controls on companies that sell certain technologies to China, and the fear that relationships with China could affect their businesses and their ability to attract US companies that might acquire them.
Published by Globes, Israel business news - en.globes.co.il - on October 28, 2019
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