Nechemia (Chemi) Peres’ optimism comes straight from his family: he is optimistic to the core, real, and a true believer in the path he’s taken. Peres is responsible for one of Pitango II’s most prominent exits – AudioCodes – along with a huge stake in the $500 million Pitango III fund. Peres also serves as director of BackWeb, as well as promising portfolio companies such as MystiCom. Another directorship manned by Peres is a bit unusual on the VC scene: He serves as a director of Koor, the corporation that invested $35 million in the fund that he himself manages.
Peres hooked up with Rami Kalish in 1996 to form Pitango II. Even then Peres was a leader among venture capitalists in Israel, with four years’ experience managing Mofet and a slew of successes such as VocalTech, Orckit, NiceCom, and others. In 1999, Peres opened offices in Palo Alto, hoping to ride the wave of content companies that yielded millions for the funds. He was twice burned by the experiment: once by Shopserve.com and again by GoRefer.com, both of which closed and erased from Pitango’s portfolio. In the case of GoRefer, Peres even established a precedent as he was among those who dismantled the startup, which still had cash in its coffers.
Despite Peres’ contagious optimism and dashed Internet hopes, he was among prominent among those predicting the VC market crash. He forecast significant dips in the value of Israeli startups, even before the beginning of 2000, a prognosis that materialized exactly as he said it would.
Despite this, Peres and Pitango were the aggressive investors in Israel in 2000, and lately it’s begun to look like they’ll reap the harvest of their portfolio companies. Pitango III, despite its size and youth - only 1.5 years old - is already in the twilight of its life in everything regarding initial investments, and it looks like 2002 will see Peres and his partners tackling a challenge the likes of which they’ve never faced before: raising the next round of financing in the current climate. The extent of their success - as is always the case with Pitango - will be an indicator of success in the Israeli VC market as a whole.
Published by Israel's Business Arena on September 16, 2001.