Despite the crisis gripping the venture capital industry, Mofet Venture Capital Management succeeded in closing Q1 2001 with a profit of NIS 7.1 million. This is less than its NIS 132 million profit in the corresponding quarter last year. However, as the write-off season swings into high gear, posting a profit is a handsome achievement, regardless of its size.
Mofet realized some of its holdings in Precise Software solutions in Q1, posting a pre-tax profit of NIS 33.7 million. In contrast to its impressive success with Precise, Mofet had a setback with VCON, which is traded on the Nouveau Marche in Paris. VCON held a private placement in February at a company value that was less than the value at which Mofet invested in it. Mofet consequently wrote off NIS 6.1 million on its investment in VCON. Mofet also wrote off NIS 1.7 million on its investment in NemoDynamics, after NemoDynamics held a financing round in Q1 at a company value lower than that on which previous financing rounds had been based. Mofet participated in the financing round.
It appears that Precise, a developer of bottleneck busting software, promised it would make a profit in Q2 as well. Mofet sold $3.7 million worth of Precise shares in Q2, and is expected to post a $3.4 million pre-tax profit.
Mofet made three new investments, totaling NIS 10 million, in Q1. The biggest investment, amounting to $2 million, was in Virtio, a US company.
The other two investments were follow-up investments in NemoDynamics ($144,000) and in Correlate Technologies ($223,000).
Published by Israel's Business Arena on 7 May, 2001