Keshet Media Group has raised $65 million from Israeli institutional investors, Mivtach Shamir, media companies and private investors for a new venture capital fund called Stardom Ventures, sources close to the matter have told "Globes."
The fund, which was officially closed on June 30, will invest in startups in the media sector including video-tech, ad-tech, content, advertising and marketing, and ecommerce. The fund will invest between $1 million and $3 million in its initial investments in early stage Israeli startups (pre-seed, seed and Series A rounds).
Like other media and broadcasting companies worldwide, Keshet is coping with erosion in its traditional revenue streams from TV advertising as a significant portion of advertising budgets are switched to the tech giants platforms like Facebook and Google as well as streaming TV companies like Netflix and Amazon prime. Consequently Keshet, led by CEO Avi Nir, has been seeking new growth engines.
Keshet began investing in startups in 2016 when it set up its KDC Fund in partnership with US company Dick Clark Productions and Mivtach Shamir. The fund raised $10 million and made 10 pre-seed and seed investments. Stardom is a continuation of KDC Fund and will operate as a traditional VC fund rather than like KDC which was an investment fund controlled by Keshet.
Keshet startup funds managing general partner Danny Peled told "Globes," "When we founded KDC our model was to be like corporate funds of media organizations for investments in startups like Verizon Ventures, Comcast Ventures and ATT Ventures. Today in Stardom Ventures we are looking at the way funds like Andreessen Horowitz operate in that they are both venture capital funds and publishing a content portal."
He added, "Just as there are venture capital funds that specialize in cybersecurity, fintech or biotech, we are a fund that specializes in media. We believe that our expertise and connections that we have created can help predict the success of startups in the media sector in a better way than a general investment fund. In addition almost every startup that we have invested in uses Keshet's resources like installing the tools developed on the Mako and N12 websites in order to sharpen their abilities."
Peled says that Keshet's appetite for startup investments has been whetted by three successful exits in 2020: Cloud based remote cybersecurity company ODO Security which was acquired by Check Point for $30 million; IMGN Media, which specializes in building content brands and was sold to Warner Music for $90 million; and Uponit which develops technology to thwart ad-blocking and was sold to Blockthrough for an unknown amount.
Peled said that Keshet received high returns for these three exits.
Published by Globes, Israel business news - en.globes.co.il - on September 12, 2021
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