Israeli VC Funds Struggled to Raise in 2009

The latest IVC report shows that Israeli VC funds were able to raise only $229 million in 2009, a staggering 72% less than $803 million raised in 2008 and the third lowest amount raised per annum in the last decade.

Only three Israeli venture capital funds completed their fund raising efforts in 2009:

  • Sequoia Capital Israel, announced final closing of Sequoia IV, a $200 million vintage 2009 fund.
  • TriVentures II, a $25 million medical device fund (with American medical technology company Medtronic Inc. as its main investor)
  • Startvest 09, the Targetech Innovation Center’s new fund, which raised $3.7 million

In 2010, the capital available for investment in first round and follow on rounds now stands on $1.2 billion (net management fees and operational expenses). Of that, IVC believes that $400 are already committed for first investments and

Koby Simana, IVC CEO, said:

“foreign institutional investors – who before the crisis had been the lead source of capital invested in Israeli funds – have suffered serious losses due to the credit crunch. These losses have reduced capital available for investments. The decrease in capital raised by Israeli venture capital funds reflects a global trend. In 2009 for example, US venture capital funds suffered a 48 percent decrease in their fund raising efforts, compared with capital raised in 2008.”

A sign of the times or lack of performance?

A report by the California Public Employees’ Retirement System (CalPERS) released this week (see Globes), showed that most Israeli venture capital funds had negative performance in Q3 2009. The Carmel I Fund, raised in 2000, had the highest performance, giving an internal rate of return (IRR) of 8% and a positive multiple of 1.4.  Other funds, including Apax Israel II, Israel Seed IV and JVP showed negative IRRs of 20-30%.

Capital Raised by Israeli VC funds by Vintage Year* ($B) 2000-2010(E)

Eze Vidra
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Eze Vidra

Chief Innovation Officer at Antidote
Eze is the Chief Innovation Officer at Antidote, a startup helping patients search and match to clinical trial, to accelerate medical breakthroughs. Previously, Ezewas a General Partner at Google Ventures Europe. Before GV, Eze founded and led Campus London, Google's first physical hub for startups, and was the Head Google for Entrepreneurs in Europe. He's an experienced product manager and startup mentor. In 2012 Eze founded Techbikers, a non-for profit supporting children education in developing countries.
Eze Vidra
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Eze Vidra

Eze is the Chief Innovation Officer at Antidote, a startup helping patients search and match to clinical trial, to accelerate medical breakthroughs. Previously, Eze was a General Partner at Google Ventures Europe. Before GV, Eze founded and led Campus London, Google’s first physical hub for startups, and was the Head Google for Entrepreneurs in Europe. He’s an experienced product manager and startup mentor. In 2012 Eze founded Techbikers, a non-for profit supporting children education in developing countries.

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