Dadi Perlmutter, Rami Hadar, and Eldad Tamir want to increase the amount of late-stage funding so Israeli companies can grow bigger before they exit
Three Israeli hi-tech veterans Dadi Perlmutter, Rami Hadar and Eldad Tamir have announced the launch of a new fund, Eucalyptus Growth Capital.
The fund is seeking to raise a total of $300 million from investors around the world and intends to invest in late-stage funding of startups.
“We plan to invest at the C stage and later,” Rami Hadar, one of the fund’s founding partners, told Geektime. “It has to be a long way after product viability and sales.” The fund will invest $15-$30 million in each company.
Hadar said that $10 million in annual sales would be a good stage for their fund to come in at. The companies they are seeking to invest in are “anything to do with digital revolution, man-machine interface, artificial intelligence, machine vision, IoT, and mobile applications.”
In short, everything that’s hot right now in hi-tech.
“But not biotech,” Eldad Tamir rebutted to Geektime. “That’s not our expertise.”
Not enough late-stage funding in Israel
All three partners concur that Israel suffers from a lack of late-stage investors.
“Israeli companies exit too quickly,” Dadi Perlmutter told Geektime.
“Israel is one of the top two or three centers for innovation in the world. The next stage is to grow bigger companies rather than sell them early on. We see more value in that, obviously financially, but also for Israel as a whole.”
“We don’t claim there is no late-stage funding.” However, the company’s analysis shows that in the U.S., there’s 50% more late-stage funding in comparison to Israel.
All three partners say that they’d like to see their fund produce ten more Israeli companies like CheckPoint.
“Or another Mobileye,” said Tamir. “In 10 years, we want to see more companies grow beyond $1 billion.”
“NICE and Amdocs are already there. The industry is maturing but in order for that to happen the ecosystem has to change as well,” he added.
Three industry leaders
All three partners will invest in the funds themselves and are well situated to attract investors from around the world.
Dadi Perlmutter served as an executive vice president and general manager of the Intel Architecture Group (IAG), and Chief Product Officer of Intel Corporation.
Rami Hadar is the former CEO of Allot [NASDAQ:ALLT]. During his eight years at Allot, Rami grew the company’s sales to over $100 million, made three acquisitions and led its public offering to NASDAQ.
Eldad Tamir is the founder and CEO of the Tamir Fishman Group, which today manages over 16 billion shekels in different asset classes, and is one of Israel’s leading economic public figures. Eldad has over 25 years of experience in investments, investment banking, and venture capital.
An important part of Eucalyptus’ strategy is the assembly of an advisory board with world class industry leaders to help portfolio companies scale and penetrate international markets.
“Our advisory board members will bridge the gap knowledge base and relationship base between Israel and Silicon Valley,” says Perlmutter.
When asked why they named their fund Eucalyptus, all three partners chimed in.
“The eucalyptus is a huge tree. There aren’t that many big trees in Israel. If we were in the U.S., we might have called it Sequoia.”
“The Eucalyptus grows fast. Plus it has this mystical romantic role in the growth of Israel.”
“From what I hear,” adds another partner, “there are Eucalyptus trees as well in Silicon Valley.”
Indeed, there are many.
Does that mean Eucalyptus wants to grow companies in Israel and take them to Silicon Valley?
One of the founders stated, “We want to do whatever is commercially right for them. We hope most of the growth will happen in Israel. But at the end of the day, to be a large sustainable company, you need to be an international company.”