TechNation: Israel Secondary Funds Raises First $70 Million for New Fund

First tech center for Israeli Arabs opens in Kafr Qasem; Riskified raises $25 million for e-commerce fraud prevention; Cellect raises NIS 8 million for immune regeneration technology.

Israeli high-tech workers. Rare is the Ethiopian-Israeli among them.
Alon Ron

Israel Secondary Funds raises first $70 million for new fund

Israel Secondary Funds, which invests in venture capital and private equity funds as well as directly in companies, said Monday it had raised the first tranche of capital for its second fund. ISF didn’t say how much it has raised for ISF II, but that amount is estimated to be $70 million of its $100 million target, with most of the capital coming from Israeli institutions, family investment offices and private investors. Dror Glass, who formed ISF with Shmuel Shilo and Nir Linchevski, said the new fund aimed to fill a gap in startup financing. “Companies today are staying private for longer to build a significantly bigger business before they go public or stage an exit,” he said. “As a result, there’s a growing need by entrepreneurs and investors for liquidity in the years before an exit.” One way the fund will work is to buy out investors in existing funds that want to cash out. ISF I was formed in 2009 with $50 million. (Eliran Rubin)

First tech center for Israeli Arabs opens in Kafr Qasem 

The first school in Israel for budding Arab entrepreneurs and an accelerator to provide an initial home for their startups opened Friday in Kafr Qasem, part of the Little Triangle area north of Tel Aviv. TRI/O Tech, as the new center is called, is part of the Arab town’s efforts to lure high-tech companies to its Lev Ha’aretz industrial zone while encouraging more Israeli Arabs to become a part of Startup Nation. The 6-million-shekel ($1.5 million) center is co-sponsored by Tsofen, a nonprofit organization helping Israeli Arabs enter high-tech, and the Massachusetts Institute of Technology’s MIT Forum, with support from the U.S. government. “TRI/O Tech will encourage young entrepreneurs, bring businesses and create badly needed jobs for the area and create an entrepreneurial ecosystem for the Triangle,” said U.S. Ambassador Dan Shapiro at the opening ceremony. (Janan Bsoul)

Riskified raises $25 million for e-commerce fraud prevention

Riskified, which helps online retailers such as Burberry to block credit fraud, said last week it had secured $25 million in new capital in a financing round led by the Israeli venture capital fund Qumra Capital. Other new investors included Israel’s Phoenix Insurance, Japan’s NTT DOCOMO Ventures and existing investors Genesis Partners and Entrée Capital. Riskified said the round, which brought total funding since it was founded in 2013 to $31 million, would be used to expand operations in the United States and Europe and hire scores of new employees. The company declined to detail its finances, but the round is believed to have been conducted at a $100-million valuation before the money. Riskfied has about 80 employees, most of them working from its Tel Aviv headquarters. Its technology uses machine learning algorithms, behavioral analytics and device fingerprinting to verify credit card status for online orders. (Inbal Orpaz and Eliran Rubin)

Cellect raises NIS 8 million for immune regeneration technology 

Cellect Biotechnology, which develops technology that enables the functional selection of stem cells, said Wednesday it had raised 8 million shekels ($2.05 million) from a group of Israeli and foreign investors. Founded in 2011, the company was recently approved to conduct preliminary clinical trials at Schneider Medical Center in Petah Tikva on healthy volunteers. “The capital we’ve raised will enable the company to advance its clinical and business plan, including registration of its shares in the Nasdaq in the United States,” said Deputy CEO and CFO Ronen Twito in a statement. The fundraising was done at 1.39 shekels a share, an 8.5% premium over the stock’s Sunday closing on the Tel Aviv Stock Exchange, where the company is traded. Cellect shares rose 9.2% to 1.40 shekels Monday. (Eran Azran)