In the midst of these difficult days for Israel, it seems that leading US venture capital funds have decided, almost as a body, to raise morale, and continue to strengthen their appreciation of Israeli high-tech companies. One after another, several leading firms have announced the establishment of Israeli operations. The first was Benchmark, followed by Hyperion. Today, “Globes” has learned that two more funds, Accel Partners and Greylock have announced operations in Israel.
Accel partners manages a $3 billion fund, with successes such as billing company Portal Software and media company Real Networks under its belt. Its Israeli investment is P-Cube, whose CEO is Yuval Shahar.
Greylock manages a smaller fund of $850 million. It has no direct investments in Israeli companies, but has posted successes such as Ascend, which was acquired by Lucent, Phone.com, which merged with Software.com and Storage networks.
The two funds are entering investments in Israel in an unusual manner. One man, Moshe Mor, who founded and ran SPL WorldGroup, will serve as the liaison for both companies in Israel. Mor does not reside in Israel, but in San Francisco, and the investments in Israel will be carried out in cooperation with leading Israeli funds, and not directly.
The decision is testimony of the esteem Israeli funds have earned in the US also, as well as the fact that these funds are closely acquainted with the Israeli venture capital market and have a greater understanding of its needs.
The target date for the beginning of Mor’s operations in Israel is December 1. Accel partner’s operations in Israel will be part of a new $500 million fund it is establishing for investments in Europe. The two funds intend to focus on as early investments as possible, preferably at the seed stage, through their connection with the Israeli funds.
According to Mor, the two funds believe in cooperation and joint investments with Israeli funds, despite the intensifying competition between them.
Published by Israel's Business Arena on 26 November 2000