In the very short time since its Initial Public Offering (IPO), the Sure-Tech R&D Partnership (TASE: STEC.L) has already shown returns for its investors after portfolio company Vesttoo has completed an additional financing round of $6 million from the Hanaco venture capital fund, at a valuation 80% higher than the valuation at which the Partnership invested in it four months ago.
SureTech, which targets investments in innovative technologies in the insurance and financial sectors, is one of the R&D Partnerships that held an IPO on the Tel Aviv Stock Exchange (TASE) last year. The Partnership, whose founders are Adi Zim (owner of the Adi Holdings Group) and Dani Naveh, who has 25 years of experience in key positions in both the public and business sectors, raised NIS 26.2 million last April.
Vesttoo, which was founded in 2018 by CEO Yaniv Bertele, CPO Alon Lifshitz, and CTO Ben Zickel, is one of two investments made by SureTech since its IPO. Sure-Tech invested $2 million in Vesttoo at a valuation of $20 "before money," on a fully diluted basis, for a 7.8% stake.
As part of the current financing round from Hanaco, previous investments totaling $1.5 million will be converted as part of the SAFE mechanism allocated to Vesttoo by other investors.
Vesttoo has developed a technological solution for the risks management sector, which allows insurance and reinsurance companies to manage actuarial risk through the capital markets by using financial instruments for investment. These instruments are built by using artificial intelligence that assess the risks of insurance companies in an objective way and allows them to price their risks. Vesttoo's aim is to solve the problem of the need to tie up capital according to the type and size of the activities and in line with regulatory requirements. This practice could avoid entering into the Solvency II Directive.
Hanaco is an Israeli-American fund, which was founded in 2017 and invests exclusively in Israeli companies. The fund manages investments worth more than $400 million. So far the fund has invested in 32 companies, including Moovit, which was acquired by Intel.
Sure-Tech CEO Ran Tzror said, "We welcome Hanaco fund in participating in the investment in Vesttoo and we are pleased that SureTech's well thought out strategy of investing in companies with attractive pricing, just ahead of their business breakthrough point, has proven itself again - especially as it is possible to see the creation of value for our investors. We hope that in the very near future, we will see additional developments in companies in which we have invested as well as in new investments that we will undertake."
Vesttoo CEO and cofounder Yaniv Bertele said, "We are very pleased that the Hanaco fund has joined the company as an investor. This is a major vote of confidence in our activities towards growth and creating value. The investment will allow the company to achieve its business targets and strategy, which includes developing an insurance-linked program - an innovative plan that will allow institutional investors to invest in alternative reinsurance companies by putting up existing securities as collateral, and developing the world's first digital platform for trading in insurance risks."
Published by Globes, Israel business news - en.globes.co.il - on August 8, 2021
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