It was nearly 30 years ago that the first venture capital funds were founded in Israel including Pitango, Viola and JVP. The funds invested small amounts in Israeli startups. They were soon joined by American venture capital like Sequoia and Greylock (no longer active in Israel), which invested in startups in seed and Series A financing rounds. They were followed by major US brand funds like Bessemer, Battery and Lightspeed, which invested in the later stages of startups.
At the same time a new generation of Israeli venture capital funds emerged such as Qumra and Haim Shani and Moshe Lichtman's IGP, which invested fatter checks in growth stage startups, frequently with high valuations, in Series C and D financing rounds.
In the past few months, we have seen Israeli companies celebrate a new stage in their maturity: SoftBank and Blackstone (and Insight Partners, which is meanwhile investing from outside) have been writing checks worth tens and even hundreds of millions of dollars for companies worth at least $200 million and often a lot more. This is not private equity investment and rehabilitating companies but joining a fast growing company on its relatively safe and successful international journey.
So while SoftBank's entry into Israel is certainly another milestone on the journey to startup maturity, there is still some way to go. The coronavirus era has been a watershed in the flow of old capital into technology. The investors in Blackstone and Softbank represent to a great extent 'old money' - capital made from banking and investment, real estate, oil and commerce etc. That's the reason that these large funds were established in countries like Japan, the US and UK. It won't be long now until there will be enough capital in Israel for the creation of a large investment bank here too. If in the past we spoke about an 'Israel Nokia,' perhaps the time has come to talk about an 'Israeli SoftBank.'
Published by Globes, Israel business news - en.globes.co.il - on July 9, 2021
© Copyright of Globes Publisher Itonut (1983) Ltd. 2021