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Tuesday, July 18, 2006

Fund nets $150m for start-ups in Israel

Here's some good news and proof that in some respects "business as usual" continues here.

The Boston Globe is reporting that Greylock Partners of Waltham, which had invested in eight Israeli companies through previous funds, said its new Greylock Israel fund, closed June 30, is its first fund dedicated exclusively to investments in Israel, a global center for technology innovation. Other venture capital firms, like Benchmark Capital and Sequoia Capital of Silicon Valley, also have made extensive investments and based partners in Israel.

Many large US-based technology companies, including chip maker Intel Corp. and software giant Microsoft Corp., have set up or expanded operations in Israel over the past decade to tap into the engineering talent of a country whose labs have generated innovations ranging from instant messaging to microprocessor technology.

Yesterday, employees at an Intel research and development center in Haifa, closer to the Lebanese border, were forced into bomb shelters during a barrage of rockets, according to the Reuters news service. Intel's employees continued working on laptop computers using wireless underground connections, the news service reported.

Marinac said the Israeli partners want to put Greylock's money to work in early-stage companies in fields like information technology, communications, consumer and Internet content, and digital media. The firm's previous investments in Israeli companies included Red Bend Software, database aggregator HyperRoll, and Siliquent Technologies, a networking company acquired by Broadcom last year.

Even with the tensions in the Middle East, venture capital investment in Israeli start-ups in the second quarter increased 12 percent over the first quarter and 4 percent over the second quarter of last year, the Israel Venture Capital Research Center reported yesterday.


While many Israeli start-ups in the past moved their headquarters to the United States, keeping research and development labs in Israel, more are now keeping their home offices there as well so executives can be closer to growing markets in Europe, India, and China, said Mark G. Heesen , the president of the National Venture Capital Association in Arlington, Va. Recent violence in Israel and India may deter venture investors inexperienced in those markets, but firms that have invested there in the past will probably continue doing so, he said.

``Anything that disrupts the normal flow of things is a concern," Heesen conceded. ``But when has there been a quiet time in Israel? It's part of life there that there's some strife going on. Still, many would say if there's going to be another Silicon Valley anywhere outside the United States, Israel would be the ripest place."

P.S. [Cheap self-promotion:] One of the things I do for a living is to represent Israeli venture capital companies.... [/cheap self-promotion]


At 1:56 AM, Blogger Kranky (in the civilized world) said...

Maybe if we relocated from Michigan USA to Israel, we could get funding. There seems to be a defined lack of interest in funding anything but medical devices around this neck of the woods.

At 2:29 AM, Blogger ShumBaayaMyLord said...

Carl, maybe one of these days you and I should look into doing some joint business, or at least into possibly cooperating in some measure. I'm Boston-area-based, spent about 6 months on contract for a project for Ramat Gan-based Japan market-entry consultancy Triangle Technologies, and I can tell you that Israeli start-ups that:

a) set up shop in the Boston area;


b) start contemplating what they might do to get into the Japanese market,

are ill-served or at least underserved. I do Japan enterprise IT--Japanese business in general has been my professional life since 1988 and the enterprise software domain there specifically since 1996. I've lived in Japan extensively, speak/read/write Japanese extremely fluently, and currently operate out of the Boston area where I grew up.

Just today I was in a very fruitful meeting between longtime counterparts of mine from Nihon Unisys Ltd. (in visiting Boston from Tokyo) and a very promising Lexington-based startup in the Access & Identity Management space--just to give an early-stage bizdev example.

If you think there's what to talk about let me know to reach you by emailing me via my contact gateway at LGF. We probably know some of the same people in Israeli high-tech, like my Harvard classmate Russell Rothstein of Zetapoint, etc.

That's *my* shameless plug--only once I promise...

At 4:54 AM, Blogger Carl in Jerusalem said...

kranky (in the civilized world),

Biotech is the hottest thing here right now. So you may be right about that.


I grew up in the Boston area (Newton) and my father still lives there in Brooline (I spent about a month there last summer - unfortunately because my mother passed away).

I'm planning to be in Boston in August. I'd love to get together with you and see if we can do something.

At 9:17 AM, Blogger ShumBaayaMyLord said...

Carl, Thanks for the pleasant response. I hope B"H your father is doing well in Brookline, and I'm sorry to hear about your mother's death.

Assuming that you can reach me with your email contact info via LGF, where I am registered under this same posting-name, please drop me a line if/when you can, and we can see about taking it from there.

FYI, 1st-half August is good, but 2nd-half August is iffy, because I may go over to Tokyo for about 7-10 days.

Chazak veEmatz!


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