The ONLY 8 Things That Matter for Israel’s Venture Capital Industry

Sarah Lacy’s blog post calling “I told you so” attention to Israel’s shrinking pool of venture capital kicked off quite a reaction. Lacy’s blog post coincided with new data showing that venture capital in Israel shrunk last quarter while it grew in the USA. And then it was followed up by renewed comments by some entrepreneurs suggesting that Israel’s venture capitalists were out of step with entrepreneurs and Batya Feldman’s rebuttal about the focus of Venture Capital. Do we all feel better now?

Frankly, all of this prose and punditry do not matter a whit. Israel’s now mature venture industry and funds will be judged by only one thing: Can it/we build large companies and exits? Simply, nothing else matters. Small M&A activity does not work in VC math. Additionally, we do not want or need a Nokia. Just big companies with big exits like Checkpoint, Mellanox, Galileo, Shopping.com and others of the last vintage. As Conduit CEO Ronen Shilo pointed out in a comment on Sarah’s post, that is all that matters. So can we do it?

With that in mind, below is an unscientific list of 8 companies that could/must matter for Israeli venture capital. My criteria are companies that I assume or know have tens of millions of dollars in revenue and are venture backed. (for a cool & up and coming list, see/compare this quora post of a year ago) Feel free to add or subtract companies in the comments section. I included the Venture funds invested in each company for reference. The list does not include healthcare companies since I am ignorant on the sector. The list is in alphabetical order.

Conduit (Benchmark*, JP Morgan, W Capital)

FiftyOne (Pitango, Vintage, Delta)

Installcore (Carmel)

Kenshoo (Sequoia, Arts Alliance)

LiveU (Canaan, Pitango, Carmel)

Outbrain (Gemini, Lightspeed, Carmel, Index, Rhodium)

Panaya (Benchmark*, Battery)

Wix (Mangrove, Bessemer, Benchmark*, Insight, DAG)

****July 21st Addition****
I sat next to someone on the plane home who read my blog post and suggested that I add to my list:
CyberArk (JVP, Goldman Sachs)
Forescout (Accel, Pitango, Meritech, Amadeus)

****July 24th Addition****
Solaredge (LightSpeed, Opus, Genesis, Vertex)
Lumus (Motorola, JGV)

Below is a bonus list of non-venture backed companies that fit the above financial criteria and therefore matter to the eco-system but not to venture returns since they are not backed by Venture Capital funds:

Objet

PowerMat

Viber/Imesh

MobileEye

*(Obviously, for full disclosure, I am a partner at Benchmark)

[Originally published on 19th July 2012 by MIchael Eisenberg]