Index Ventures Looking to Expand Israel Portfolio

Index Ventures is planning to expand its investments in Israel, Reuters reported Monday. The firm is actively looking for new technology investments in Israel, and has two funds to invest out of: a 350 million euro ($494 million) fund for early-stage companies and a 400 million euro fund for later-stage investments, Reuters wrote. Index currently invests the build of its money in the U.S. and Europe.

(Reuters) – European venture capital fund Index Ventures is actively looking for technology investments in Israel, its general partner said on Monday.

About half of Index Ventures’ portfolio of more than 180 companies is in those based in the United States. Some 40 percent are in Europe, with no more than 10 percent in Israel.

“We believe there are amazing opportunities to invest in Israel,” Saul Klein told Reuters.

Index Ventures has backed Skype, Lovefilm and MySQL, and last week sold its stake in Cloud.com to Citrix for what was believed to be in excess of $200 million.

It has two new funds to invest from: a 350 million euro ($494 million) fund for early-stage companies and a 400 million euro fund for later-stage investments.

As such, Klein said Index was seeking Israeli investments in early and growth phases, and that money was not really an issue.

“We can write a cheque for as little as $50,000 and we can write a cheque for as much as $75 million,” he said, noting Index has invested more than $50 million in Israel.

“We have the capital to invest. The constraint is finding great opportunities.”

Last month, Index led a $10.5 million second funding round for “anti-frustration” software company Soluto whose programs makes it easier for non tech-savvy computer users to troubleshoot PC problems.

Another Israeli investment came in 2008 when it led a $15 million round in family history website MyHeritage.

Both companies operate on the popular “freemium” model, providing a free basic service and charging for more advanced features.

Klein, the founder of start-up accelerator Seedcamp, has moved to Israel for 18 months to seek investments in the country’s booming tech sector.

Medical devices is one of the main areas of focus for Index, which is also looking at Israeli companies specialising in Internet and mobile software, Klein said.

The global tech industry has undergone big changes in recent years with a trend to more venture funding in very early-stage companies, particularly in software, Internet and mobile services.

Those companies typically need far less initial capital — no more than a few hundred thousand dollars — to see if they are viable.

“Israel is a little behind the curve but I expect it to catch up fast,” Klein said, adding Israeli venture funds were focused on businesses that had “deeper technology” requiring more funding to start up and develop.

“It takes at least $20-$30 million to figure out if a semiconductor or telecoms infrastructure company will succeed. It takes less than a million dollars, or half a million dollars, to see if a mobile app or Internet app will succeed,” he said.

($1 = 0.708 Euros)

(Reporting by Steven Scheer; Editing by David Hulmes)