YL Ventures closes $400m Israeli cybersecurity VC fund

Yoav Leitersdorf Credit: Maxim Dinstein

YL Ventures has raised its largest ever fund despite admitting that the startup financing market is in a slowdown.

Venture capital firm YL Ventures, which specializes in investments in early stage Israeli cybersecurity startups, has announced the closing of its $400 million fifth fund. This is by far YL Ventures largest fund following its $135 million fourth fund and $75 million third fund. YL Ventures now has $800 million under management from traditional wealthy overseas investors who do not include investment institutions or Israelis.

YL Ventures was founded in 2007 by Yoav Leitersdorf, who lives in California and lends his initial to the firm's name. It was the first fund to specialize exclusively in Israeli cybersecurity although it since has rivals such as Cyberstarts, Glilot Capital and Team8, which are focusing on cybersecurity. To date, YL Ventures has invested in 25 companies of which 11 have been sold, one was shut down and 13 are still operating.

2021 was very successful for YL Ventures with large stake sold from three investments. Axonius in which shares were sold for $270 million, Orca Security in which shares were sold for $250 million and Medigate in which shares were sold for $100 million. On its third fund YL Ventures has achieved overall returns of 5.4 net on the money invested.

YL Ventures senior partner Ofer Schreiber told "Globes," that the new fund will invest in 10 startups at the seed stage, at an average of three startups per year. But the size of the fund will also allow YL Ventures to make follow-on investments in later rounds.

Schreiber acknowledges the significant change in momentum in the startup investment market in the wake of the sharp falls in share prices of tech companies traded on Wall Street. "We already see a slowdown in the market with the large funds that lead follow-on rounds in startups becoming more cautious compared with the last year or two. This influences the size of financing rounds, the valuation received by companies and the business performance of startups that need them for additional financing."

Published by Globes, Israel business news - en.globes.co.il - on May 10, 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.

Yoav Leitersdorf Credit: Maxim Dinstein
Yoav Leitersdorf Credit: Maxim Dinstein
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