TLV $250 million fund looks further afield for Israeli tech startups

JERUSALEM : Venture capital investor TLV Partners launched a $250 million fund on Monday to invest in early stage Israeli-founded startups that will mostly be based in the United States owing to concerns over proposed changes to the Israeli judicial system.

TLV’s fifth fund, which will lift its assets under management to more than $1 billion, aims to make about 25 investments of between $4 million and $8 million each in software, fintech, biotech, cybersecurity and artificial intelligence (AI) startups.

TLV Partners, which said it could invest as much as $20 million per company over subsequent investment rounds, has already invested in 60 Israeli companies and exited 10 so far.

“People are definitely interested in Israeli companies and Israeli technologies,” said Rona Segev, a managing partner at TLV, though she also flagged concerns over the Israeli government’s judicial plan.

The proposals by Prime Minister Benjamin Netanyahu’s hard-right coalition to give the government greater say in the selection of judges while limiting the Supreme Court’s power to strike down legislation have led to mass protests and have also been cited as one of the reasons for a 70 per cent drop in tech fundraising in the first half of the year.

“It’s actually pushing the high tech industry out of Israel,” Segev told Reuters. “In the past three months, a lot of relocations are happening in our portfolio … And it’s growing very, very rapidly.”

All of the companies that TLV has invested in so far in 2023 have been incorporated in Delaware, though many Israeli companies keep their research and development operations in Israel.

“The $250 million is going to Israeli entrepreneurs but in the current political situation 90 per cent at least will go to non-Israeli companies. I don’t see a reason why it will change (that) most entrepreneurs choose to form or incorporate their company outside of Israel,” Segev said.

“As venture capitalists, we are okay investing in Israeli entrepreneurs wherever they decide to be at that point.”