PICO Partners, a venture capital fund managed by cofounder and partner veteran high-tech entrepreneur Elie Wurtman, announced today that it has raised $80 million for its second fund. The money was raised three years after PICO Partners raised $35 million for its first fund. The fund announced that it currently managed assets worth $130 million.
The partners in PICO Partners are Wurtman, Todd Kesselman, and Gina Laversa. The fund has a team of 12 in its offices in Jerusalem, Tel Aviv, and New York. PICO Partners focuses on investment in early-stage startups. It has invested in 15 companies to date: 14 by the first fund and one by the second. PICO Partners' portfolio companies include Vroom, Spotinst, ChargeAfter, and Jolt. PICO Partners has also invested in Fresh Fund, an investment fund of students in student ventures.
Wurtman says that the first fund was meant to reach $50 million, but was not completed, and the follow-on investments were made with the help of the investors in the fund, who also invested directly in the portfolio companies. In the current fund, the partners are planning to also invest themselves in the later rounds. Half of the fund is earmarked for initial investments of $1-3 million in a company, and the other half for follow-on investments.
Although the new fund is substantially larger than the first one, Wurtman expects it to also invest in about 15 startups. "The market has changed slightly, and I think that everyone sees it," he says. "We're at a turning point at which it is necessary to continue reinforcing and assembling the management capabilities of entrepreneurs in Israel. We have passed the stage at which everyone is aiming just for an exit; we're building large companies now, and we want to be part of this." Wurtman also commented that as a fund focusing on the early stages, PICO Partners has endurance, and is ready to foster large companies, rather than looking for a quick exit.
"On both the person level as entrepreneurs and at the fund level, our success is at the initial stage - bringing a company from nothing to a situation in which it has revenue, and to accelerate it with a very operative, almost entrepreneurial, perspective of how I help a company build itself rapidly. We're the best at this stage of getting the product to the market until the product's suitability for the market is demonstrated. From the macro angle, it is certainly easier to write a big check for a company that is already stable, large, and so forth, but if there's no one to invest in the initial stage, there will probably be no mature companies," Wurtman adds.
"100% of the first fund's investors participated in this fund," Kesselman says. "In addition, Honeywell Ventures invested in the second fund, and we have important new investors that are managing partners from large private investment funds, such as Carlyle Group and Bain Capital. Each of these people has a large portfolio of hundreds of companies that they own or used to own."
"If someone brings an idea that solves a problem in the retail sector, you can look at their portfolio and see whether this solution is suitable for large retailers in the US, even before we make the investment. After the investment, this company can be a design partner or a customer for the venture. This helps us shorten market penetration by our companies," Kesselman adds.
Published by Globes, Israel business news - en.globes.co.il - on September 25, 2019
© Copyright of Globes Publisher Itonut (1983) Ltd. 2019