IBI High Tech Mutual Fund announced that it would invest NIS 11 million ($3 million), less than 3% of its assets, in the Songo Media group. The fund has invested a total of NIS 14.5 million in startups to date out of NIS 120-125 million in total investments, most of it in marketable assets. A source familiar with the fund's investments said, "The fund has more deals in the pipeline… Keep in mind that the time it takes this fund to make a deal is different from the usual practice in ordinary mutual funds. After they decide to make a deal, it can take several months for it to be signed and done, because this isn't an ordinary mutual fund; it's also a venture capital fund.
The new investment in Songo is an investment in a group of companies, not just one, developing advanced technology in digital media and ecommerce. "Songo has proven that it is capable of finding sources of revenue. Its rate of revenue is phenomenal," the source says. "It's now ready to take another step forward by creating a generic system suitable for more players in the online spheres."
Yariv Gilat a partner in the investment
Songo was founded by CEO Ariel Soudak, Israel office general manager Snir Hassin, and board members Yinon Kuperstein. Its companies include Novelty Media, VidRide, Predicto, Liberdy, and BrandCrunch. Songo's subsidiaries are in various development stages, developing technological solutions on interfaces between ecommerce, media, and artificial intelligence. The group has offices in Tel Aviv and the US. The investment by IBI's fund was in partnership with Yariv Gilat, one of its investment partners who is also a leader in Songo.
IBI High Tech, which was initiated and aided by the state, is the only one of the five funds that asked to operate within an envelope of government protection that raised enough money to pass the government's threshold - NIS 403 million. It is managed by Dr. Dan Aks and Dr. Dor Lilo, who work together with consultants Eran Wagner, Uri Weinheber, and Alon Aginsky. The fund will invest up to 75% of its assets in startups. IBI High Tech completed its financing round in the first half of last June.
IBI High Tech is a marketable venture capital fund with the structure of a mutual fund. It was developed in order to enable the general public to invest in technology ventures. In July 2017, the Ministry of Finance Accountant General department and the Israel Securities Authority jointly published a "tender for selecting concerns to manage funds for investment in high-tech companies," to be listed on the TASE, with IBI High Tech being the only candidate to meet the criteria. IBI High Tech receives state benefits in the form of protection against losses up to NIS 50 million and the option of borrowing money from the state.
In mid-October, IBI High Tech reported its first investment in a startup - NIS 3.5 million in Nailomatic, together with investment partner Yigal Yaakobi. Nailomatic develops a consumer electronics product combining advanced technologies with personal esthetics.
IBI High Tech has a current net asset value (NAV) of NIS 0.9914 per unit, compared with its original value of NIS 1. The fund still features a non-marketable element and a large cash element designed to be available for investments in startups.
Published by Globes, Israel business news - en.globes.co.il - on December 11, 2018
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