Swiss venture capital fund Lakestar will begin investing in Israel and is believed to have allocated tens of millions of dollars for this purpose. The fund, which has invested in companies such as Facebook, Skype, Spotify, and Airbnb, raised €500 million in two recent financing rounds. Lakestar's investment manager in Israel is Gilad Novik, who up until now represented Horizon Ventures, controlled by Chinese billionaire Li Ka-shing, in its investments in Israel.
In Israel, Lakestar will focus on early-stage and early growth stage fintech companies planning to expand their business to Europe. It will also invest in automotive, artificial intelligence, and big data technologies.
Novik is an Israeli living in London who previously headed the Hutchison research division in Europe. A former executive at Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR), Novik says, "I have no doubt that the Lakestar fund's desire and willingness to invest in the local technology scene in Israel will benefit local entrepreneurs by facilitating an excellent and effective connection to the right places in Europe, especially in Switzerland. Switzerland is a fintech regulation leader. Its regular banking institutions are very advanced in adopting the new world of cryptographic currencies, which means that fintech companies developing solutions in these segments will be able to benefit from an entire market that is ripe to receive the new products. This is an enormous advantage."
The official announcement that the fund will invest in Israel will be made in the framework of the Switzerland Fintech-Blockchain Summit 2018 event being held by the Swiss embassy in Israel in cooperation with the Herzog, Fox, & Neeman law firm. Leading Swiss administration figures and representatives of the financial and banking sector in Switzerland will take place in the event. Among other things, the new Swiss regulation enabling fintech and blockchain companies to obtain licenses for trials and operation of services will be presented at the event. These services cannot be granted in Israel at present.
Swiss Ambassador to Israel Jean-Daniel Ruch told "Globes" that one of the main tasks he was assuming was to promote ties between the Swiss financial sector and Israeli innovation in the financial technology sector. "There are 600 Israeli fintech startups, double the number in Switzerland," Ruch says, "even though the financial sector there is very strong, and the Swiss banks are number one in the world in financial asset management. It is a national interest for Switzerland to maintain its lead, and we know that fintech, especially blockchain, but also ICO, will change the world. Here is where we connect with Israel, which is a leader in innovation."
Ruch says that the Swiss embassy has so far organized visits to Israel by 12 groups and delegations of businesspeople and administration figures, and initiated a number of conferences and meetings aimed at creating work connections with Israeli fintech companies.
Another aspect is an economic dialogue between Israel and Switzerland in the framework of the G2G strategy. At a meeting between the two countries' ministers of finance, a memorandum of understanding (MOU) was signed for cooperation in these areas. One possible result of this cooperation could be the adoption of the principles of advanced Swiss regulation in Israel. Ruch says, "Switzerland is a global leader in development of regulatory frameworks, which on the one hand facilitate transparency and effectiveness in companies and on the other hand reduce the risk to the public and make sure that no improper use is involved. If you are a new player in this area and want to develop a blockchain or ICO business, the new instructions tell you what exactly has to be done in order to obtain a license quickly."
Published by Globes, Israel business news - en.globes.co.il - on November 28, 2018
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