Mapping the Israeli Venture Capital Ecosystem
Over the past several years, and more recently with the launch of our dedicated venture arm, we have been an active fund investor in the Israeli venture capital ecosystem. As such, we have seen how the distribution of returns mirrors that of global venture capital, where the majority of historical returns have been concentrated among a small group of top-tier funds. This sort of distribution mandates that an investor in venture capital funds build strong access to the best performing funds in the market. The most basic pillar of good access lies in strong dealflow — i.e. the ability to be exposed to the most attractive investment opportunities in the market. Naturally, there are many other components of strong access, which we will cover in more detail in our next blog post, such as providing additional value to venture firms beyond just capital commitments. As a fund of funds, we constantly aim to build strong dealflow and be exposed to all of the funds which fall under our investment scope, which later allows us to partner with the best managers in the market.
As an Israeli-centric fund of funds, the depth of the market and therefore the strength of our dealflow, is a critical component of our success. Over the past several years we have seen the Israeli market continue to grow and scale, along with the number of active funds in the market. Today, Israel is home to more than 100 active venture capital funds, with local venture capital funds raising over $2.5 billion across 24 funds in 2018 alone. The landscape has evolved tremendously over the past few years as international VCs, corporate investors and private equity groups have all significantly increased their investments in Israel.
As the market continues to evolve and new sources of capital enter the market, we have received numerous requests from both entrepreneurs and investors in our network to share more information about the emerging players in the market. After contemplating what would be the best approach to sharing this information, we decided to map the different venture funds, with an emphasis on those that predominantly invest in Israeli-related companies. We are now happy to share our most up-to-date mapping of the Israeli venture capital ecosystem.
A few notes about our mapping: our mapping is mostly focused on financial investors and excludes Biotech and Life Science funds, corporate venture arms, angel investors and networks, incubators and accelerators. We split the mapping into two fund categories — “Local Funds” and “Foreign Funds”. Local Funds include all funds (or private investment vehicles) which predominately invest in Israel-related startups regardless of the funds’ location. Foreign Funds includes all funds (or private investment vehicles) which are foreign-based and have a significant exposure to Israel-related startups, but only includes the most active funds falling under such a scope. All funds mapped were actively investing in new portfolio companies during 2017/8. This list is not exhaustive, and there may be funds which are not included in the mapping. If you think your fund was miscategorized or you have information about funds we may have left out, please reach out to us.
