All year long, we here at Geektime showcase Israeli startups that are raising funds, acquiring companies, and being acquired themselves. Our goal is to introduce our readers to innovative, revolutionary (and sometimes completely unnecessary) products that are developed in the Israeli ecosystem. Behind almost every product and company, you'll find a venture capital fund that invests money, offers advice, shares their experiences, and sometimes suffers losses.
There are currently 202 venture capital funds operating in Israel (132 of them are Israeli and 70 of them are foreign funds). Each VC specializes in a different stage in the life of a startup, areas of expertise, and has its own unique investment strategy.
Each month, Geektime will focus on one venture capital fund and tell their story, including how they choose which companies to invest in, their successes and failures, red lights they’ve encountered along the way, and which individuals their founders have found inspiring.
Our aim is to provide readers with a closer look behind the scenes into Israeli startups and to better understand what VC investors are looking for. Today, we will be taking a closer look at…
Year Founded: 2020.
Size: $75M - $100M.
Founders: Lee Moser, formerly of BlackRock, partner at iAngels and chief of staff to Israel's Ambassador in Washington; Roy Geva Glasberg, previously founder and general manager at Google for Startups Accelerator; and Ariel Cohen, previously a senior product manager at Amdocs.
Fund Managers: Roy Geva Glasberg and Lee Moser.
Investment Stages: Early-stage startups (Pre-Seed and Seed).
Leading Areas of Investment: AI-based Enterprise SaaS; Technology companies based on complex algorithms, machine learning, and AI.
(featured in picture) Roy Geva Glasberg, Lee Moser, Ariel Cohen, Arnaud Rodrigue, Michal Dotan and the analyst team.
Which companies in your portfolio are the most active right now?
Edge Gaming is a startup that’s developing a digital platform together with esports clubs that will enable gamers in the global community, content creators, and viewers to collaborate and connect through gaming experiences, competitive coaching, creation of content, and community activities that revolve around games, groups and professional players they most admire.
Infinigrow was founded in 2019 by CEO Daniel Meler and CTO Dor Lahav, and has 10 employees at its Tel Aviv offices. In May 2021, the company raised $5.25M in a Seed round led by AnD Ventures. InfiniGrow is an AI-driven B2B marketing attribution, planning, and forecasting platform that turns B2B marketers into revenue leaders. Their product enables organizations to make quick changes to their marketing plan, respond to changes in real-time and ensure that at any given moment marketing budgets are optimally allocated.
How many of your portfolio companies have been acquired?
It’s too early for that…
How do you decide which companies to invest in?
Lee: “The first thing we look at is our relationship with the founders who run the startup. Investments are a little bit like marriages, especially for a fund like ours that invests in early-stage startups, which need assistance building up their companies. It’s important for us to make sure that they have an entrepreneurial view and are capable of keeping up with market fluctuations since things can change quickly.”
What are some red lights that would deter you from investing?
Ariel: “A successful investment depends completely on the people running the company. Since we work so closely with the startups we invest in, it’s key to us that the founders are strong, dedicated, and ambitious. We are not put off by entrepreneurs who've failed in the past with previous ventures. They're not considered less successful, and we all learn a lot from our failures.”
How has the COVID-19 pandemic affected the market in general and your firm in particular?
Roy: “It accelerated AnD Ventures’ strategy without us even planning for this to happen. We noticed that there was a drop of at least 35% in investments in early-stage startups, compared with the surge in investments in more mature companies. Seeing this gap was a strong impetus for us to focus on new startups that were just starting out and help them build up their companies. These changes will lead more companies to focus on ARR - annual recurring revenue – and to raising capital faster than in the past. This has been fortuitous for us, since this strategy has helped us garner widespread support in early stages, which has led to increased rapid yield and faster growth rounds in the US market.”
Can you offer any tips to entrepreneurs?
Lee: “Raising capital during the epidemic has not been that different from previous years, and in some ways has actually gotten easier, since many investors have been willing to hold meetings over zoom. Come with an open mind and be willing to learn something. It’s important to us to hear you, to see that you are familiar with the market you're trying to break into. Do not despair from hearing the word ‘no’. You should keep in mind that even if investors give you a negative reply, that doesn’t mean that you shouldn’t return to them once you have progressed in the development of your product. Closed doors can always be reopened.”
How does AnD Ventures differ from other venture capital funds?
Roy: “We are the founding partners alongside the entrepreneurs we work with. We don’t just help and support startups, we are there building companies together with them. This means that we are there every step of the way to handle each challenge when it comes time for capital raising rounds, recruiting employees, dealing with customers, product customization and developing technologies. Having a supportive board is nice, but board members do not offer much help when it comes to daily decisions. This is the reason we created AnD Ventures – to offer hands-on help in creating startups from day one with any and every aspect of building a fully-functioning company.”
Looking back, are there any startups that you wish you'd invested in but didn’t’?
Ariel: “We are focused on a very small number of startups. We’re aware that it’s only natural that sometimes we’ll inadvertently let a good investment opportunity slip through our fingers. There are a few companies regarding which we feel we missed the boat, but one, in particular, was a clear miss: Suridata. We were not part of their initial capital raising round.”
Can you think of an individual in the field of investments who you’ve found particularly inspiring?
Lee: “There are many people in the industry – startup owners, as well as investors - here in Israel who are quite inspiring, and who are willing to share their knowledge and their past experiences to help build a strong community. But there are two women who stick out in my mind as especially inspiring. The first is Einat Guez from Papaya Global who not only co-founded an incredible company, she also makes herself available for startup entrepreneurs who are just starting out on their path. The second is Jesse Draper, a founding partner at Halogen Ventures, who has been a catalyst for true change in the field of investing in startups.”
Who opened the door for you?
Roy: “After working at Deloitte, Microsoft, and LivePerson, I realized that what really interested me was assisting companies who were just starting to develop their products. But only a company like Google could give me the opportunity and help me hone my skills. Yossi Matias was my first mentor who taught me to run, build, make and then fix mistakes and grow.
Meir Brand and others at Google believed in me, supported me, and made me who I am today. As an Israeli who spent time in California, and other places around the world, I’ve come to understand that the Israeli ecosystem is like none other. It’s where I enjoyed helping to create over 230 companies around the world. No other company or university can offer this kind of experience.”
Which other venture capital funds do you find impressive?
Lee: “Wow, there are so many to choose from. There are a few young firms whose work is leading to real change in the way VCs interact with entrepreneurs, such as Yaron Kniajer at Surround Ventures, Danny Peled of Stardom Ventures, and Sarit Firon of Team8 Capital.”