For Israel’s Startup Nation, Tuesday was a big deal, or more exactly five big deals: Four startup companies raised a combined $107 million from investors while a fifth company was sold for 300 million-shekel ($79.3 million) valuation.
All four of the startup raising capital pulled in double-digit investments, with cyber-security company Claroty exiting stealth mode after two years of operations to announce it had raised $32 million.
Not far behind, Cato Networks, a provider of cloud-based network security, said it raised $30 million. Ctera said it secured $25 million to expand it cloud-computing offers and Optimove, another cloud-computing startup, said it raised $20 million – the first time it had ever raised capital from outside investors.
Meanwhile, the U.S. private equity fund Marlin Equity Partners said it was acquiring a controlling stake in Israel’s QualiTest, a software testing company, at a company valuation of 300 million.
The flood of fundraising round comes at a time of growing concern that the high-tech boom is starting to recede. A survey released last week found that, the number of first-round investments in startups had fallen in the first half of this year for the first time since 2011 to 29%.
First-round investments are a barometers of investors’ appetite for startup risk and ensure there’s a pipeline of companies for later investment.
Claroty, which had been operating in secret for the past two years, said it raised its $32 million from the U.S. funds Bessemer Venture Partners, Innovation Endeavors – which run by Google chairman Eric Schmidt -- Marker LLC, Red Dot Capital Partners and Japan’s Mitsui & Company.
The company is part of the Team 8, which was founded by Nadav Zafrir, a former head of the vaunted 8200 military intelligence unit. Its products secure critical infrastructure at industrial control systems such as power grids, steel mills and oil refineries.
Cato Networks, whose founders include the Israeli serial entrepreneur Shlomo Kramer, said it raised $30 million in a funding round led by the U.S. venture capital fund Greylock Partners. Singtel Innov8, the venture capital arm of Singapore Telecommunications. Existing investors U.S. Venture Partners, Aspect Ventures as Kramer and co-founder Gur Shatz also joined in the round.
Cato’s software connects the elements of an enterprise network -- branch locations, mobile users and data centers -- into an encrypted network in the cloud.
Ctera said its $25 million investment round was also led by Bessemer , joined by the U.S. company Cisco, and Israel’s Vintage Investment Partners. This round brings the startup’s total financing to date to nearly $70 million since it was formed in 2008. Proceeds will be used, among other things, to add scores of staff to its payroll of 150, 80 in Israel.
Optimove’s $20 million round, which was all raised from a single investor – Israel growth Partners, a fund former by industry veteran Moshe Lichtman and Haim Shani. Sources said the round was conducted at a $100 million valuation for the seven-year-old company.
Unlike the vast majority of Israeli startups, Optimove was financed entire from the founders’ own capital and now being eying an initial public offering, Lichtman hinted an interview on Tueday.
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