Singulariteam, a medium sized Israeli fund founded by Moshe Hogeg and Kenges Rakishev, topped all venture capital fund investors in 2015 by making 12 first investments, according to the latest IVC-APM report by IVC Research Center and APM & Co. Law Firm analyzing first investments in Israel by venture capital funds in the past five years, and ranking the most active venture capital funds which invested in Israel in 2015.
Singulariteam's 2015 performance reflects a slight increase for the number of deals made by the top ranked fund, compared to 10 first investments made in 2014 by that year’s most active fund, JVP. Singulariteam manages $152 million via three funds - two early stage funds and a new growth stage fund. The first investments made in 2015 were funded by Singulariteam II, a $102 million early-stage fund closed in 2014.
Tied for second place, with nine first investments each, were Israeli fund Carmel Ventures and USfund Innovation Endeavors, co-founded by Google's Chairman, Eric Schmidt and Dror Berman. Carmel, with $802 million under management, invested from its vintage 2014 fourth fund.
Third place was also shared by two funds, Israeli Magma and First Time, with eight investments each. Magma, with $450 million under management, invested from its fourth fund, raised in 2014. First Time is a vintage 2014 fund, managing $60 million and managed by TheTime technological incubator's founders, focusing mainly on supporting the incubator’s graduates with supplemental funding.
The most active Micro venture capital fund in 2015 was Israeli fund OurCrowd First, with seven first investments from its vintage 2014 $10 million fund. Following OurCrowd was lool Ventures with six investments from a $33 million fund, closed in 2011. Israeli funds InovGate, Peregrine and Elevator Ventures tied for third place, with five investments each. No foreign micro venture capital funds have made it to the top of the chart.
The IVC-APM report, which analyzes trends relating to first investments by foreign and Israeli venture capital funds in Israel, points to a fall in the total number of first investments, and the number of active venture capital funds in 2015, compared with 2014’s record numbers. The downtrend is a direct result of foreign funds’ relatively lower activity in 2015, following a similar global trend, while Israeli funds increased their activity in 2015, both in the number of funds and number of deals made. However, despite the opposite trends, foreign venture capital funds maintained their leading position, with the majority of active funds and first investments.
Foreign funds made 178 investments, or 52% of first investments last year, compared to 221 investments (58%) in 2014. Israeli VC funds made 166 investments, compared to 157 in 2014, seeing the Israeli funds’ share climb from 42% to 48% in 2015, despite locals making up only 31% of the number of active venture capital funds, or the funds that made at least one first investment last year.
The gaps between Israeli and foreign venture capital funds is best explained by the average number of first investments made by each fund. In 2015, foreign VC funds made an average of 1.6 first investments per fund, while Israeli funds made twice as many investments, with 3.2 first investments per fund on average.
IVC Research Center CEO Koby Simana said, "Our analysis of the data shows a significant difference in first investment patterns between foreign and Israeli funds. Traditionally, more than 80% of first investments by Israeli funds are made in the early stages of a company's life - startup seed and R&D - while foreign funds activity is a little more evenly balanced between various stages, from seed and growth to late stages."
The report's writers found that the foreign venture capital funds that continue to rank at the top of the Most Active Funds list year after year are mostly funds that have a strong Israeli presence with a local branch, capital allocation to Israel or Israeli partners and team members who drive their continued focus on Israel. The 2015 Most Active Funds ranking includes several such funds, with Innovation Endeavors, Marker and Blumberg, all having a strong local presence, as well as OrbiMed Israel, an Israeli VC fund founded by American investors OrbiMed Advisors to spearhead their Israeli investments.
The report also suggested the micro venture capital funds phenomenon seems to be losing steam after soaring in 2011 and climbing steadily through 2014. The top micro venture capital fund made only seven first investments in 2015 compared with 12 first investments made by the top fund in the larger fund’s ranking, or 11 first investments made by 2014’s Most Active Micro venture capital fund, Titanium Investments.
APM & Co. chairman Yonatan Altman said, "The venture capital industry is reclaiming its position and place as the main engine driving the Israeli high-tech industry. 2015 witnessed the formation of new venture funds, sequel funds, technological incubators and alternative investment vehicles with significant assets under management. We are optimistic as we face 2016, given the funnel of Israeli funds under formation as well as the number of international investors continuously diverting capital to Israel."
Published by Globes [online], Israel business news - www.globes-online.com - on February 10, 2016
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