Israeli venture capital fund State of Mind Ventures (SOMV) has raised $140 million in two new funds. Sources close to the matter have told "Globes" that the money was raised from Israeli institutional bodies. The money will be divided into two funds - one for investing in early stage startups called State of Mind Ventures 3, and a growth fund called Momentum.
The capital raising represents the first closing of two funds totaling $200 million that SOMV plans to raise. The money was raised from existing SOMV investors.
To date SOMV has operated through two funds, each worth about $100 million. State of Mind Ventures 1 began investing in 2016 and State of Mind Ventures 2 began investing in 2018. Outstanding companies in SOMV's portfolio include Pliops, which has developed fast and cost-effective data center storage, and which has raised over $100 million to date. Another portfolio company is Stream Elements, which has developed a platform for producing live streaming.
State of Mind Ventures 3 will continue the work of the previous two funds and invest in seed and Series A financing rounds in startups operating on a Software-as-a-Service (SaaS) business model and in the cloud computing sector. SOMV's Momentum growth fund will invest in Series B and Series C financing rounds. Thus SOMV is joining other Israeli venture capital funds like Glilot Capital Partners, which set out as early stage investment funds before establishing a growth fund.
Growth funds are an opportunity for existing investors to increase their investment and take advantage of the increasing number of Israeli startups preferring to grow rather than seeking an early exit. However, there is aggressive competition in the growth fund sector including from major international funds. SOMV plans making about 10 investments in growth companies over the next two years.
SOMV was founded by Pinchas Buchris, Yuval Baharav and Nir Adler. Buchris, a former commander of the IDF 8200 intelligence unit and former Ministry of Defense director general, has decided not to invest in State of Mind Ventures 3 but will continue to sit on the board of portfolio companies from the first two funds. Baharav is a former partner at the Sequoia venture capital fund and senior executive at Amdocs and Adler held senior positions at Oil Refineries (Bazan), and Amdocs.
SOMV said, "We are very happy to continue to grow with our amazing entrepreneurs backed by our funds anchor investors. The capital raised will allow us to continue to invest in early stages from the seed stage alongside new activities - the Momentum fund - designed for growth stages, Which we will soon elaborate on to the market."
Buchris said, "I have decided not to join the third fund as a managing partner but at the same time I will continue to be managing partner of the first and second funds and I will be committed to their success. I will continue to serve on the board of portfolio companies of the first two funds and at the same time I will examine opportunities for other deals in the high-tech sector and I will open private businesses."
Published by Globes, Israel business news - en.globes.co.il - on August 25, 2021
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