New Greylock Partners Venture Capital Fund to Focus on Israeli Tech Startups

Fund formed by four partners of the United States technology investor raises $200 million.

Raffi Alexander / Spiderbox 2013

A new venture capital fund formed by four partners of the United States technology investor Greylock Partners has raised $200 million to invest in startups in Israel and Europe, TheMarker has learned.

The new fund, which has yet to be named, will be managed by Yoram Snir, Erez Ofer and Arnon Dinur, now based at Greylock’s Herzlia offices, and by Laurel Bowden, who works for Greylock in London. The team will continue managing Greylock Israel’s portfolio, meaning they will have some $550 million under management, making them one of Israel’s biggest tech investors.

Greylock, one of the oldest venture capital fund managers in the U.S. with more than $2 billion under management, will apparently invest some its capital in the new Israeli fund, sources told TheMarker. Greylock declined to comment on the report.

The new fund would be a welcome addition to Israel’s beleaguered venture capital industry, which has been pushed aside in recent years by foreign VCs and other kinds of investors. In the third quarter, Israeli venture funds accounted for just 19% of all investing in Israeli startup companies.

In 2013, the latest year for which figures are available, 13 Israeli venture capital funds raised a combined $526 million, down 28% from the year before – so the new fund will mark a significant addition to the Israel industry.

Formed in 2006, Greylock Israel manages two funds of its own that have invested 70% of their capital in Israel, and the rest in Europe. The first is a $150 million fund is started in 2006 and the second a $200 million fund launched five years later.

Among the exits Greylkock Israel counts in recent years is ScaleIO, a data storage company that was told to EMC for $200 million in 2013 and Aeroscout, a developer of real-time location systems that was bought by the American maker of power tools Stanley Black & Decker for $240 million the year before that.

The Greylock portfolio includes companies like Zerto, which is developing disaster-recovery technology for cloud computing; mysupermarket.com, a grocery price-comparison site; and Payoneer, which helps retailers facilitate payments in different foreign currencies.