The effects of the current market crisis have already reached the Israeli ecosystem, and despite two relatively good months prior to July, this month’s funding was particularly low. However, it seems that some have managed to escape these effects, and are even bringing money into the Israeli ecosystem
"The market is back to normal"
The Israeli venture capital fund IN-Ventures announced today (Sunday) the completion of raising $150 million for a second fund. The fund, which is managed by partners Eyal Rosner and Eitan Naor, will invest in early-stage Israeli startups from Seed to Series A.
IN-Ventures' first fund began operating in 2020 and has so far invested in seven companies in the Deep-Tech fields. The fund also took part in follow-on investments in its portfolio companies, including the quantum computing company Classiq Technologies, the hydrogen energy company H2Pro, Ottopia, and BRIA. The first fund also recorded its first exit with the sale of the cyber company GK8.
Eitan Naor, a managing partner at the fund, says that one of the advantages of the crisis is the ability to evaluate companies in a better way: "The market is returning to a normal state where there is time to examine companies in depth and the value of the companies also reflects the risk inherent in them. However, the market is still competitive and good companies have investors.”
According to him, the fund continues on the path it started in 2020, with the success it saw in 2021. He adds that the fund had no difficulty in raising the capital for investment and that its main investor was aiming for long-term investments from the get-go, so the current crisis did not deter him. "If anything, the crisis can generate long-term investment opportunities," Naor said.
Do you think we are amid a market correction? Bubble burst? Minor blow? How long is this uncertainty expected?
"It is difficult for us to speak in such terms, and we have no pretensions to know how long this crisis will last. We do think that in the long-term technology is here to stay and the needs are only increasing. The overflow of capital last year damaged the equilibrium of the market and made it difficult for both investors and companies. So, the current process in which there is a price adjustment will do everyone some good in the long term."