Tech Briefs: Israeli Startups Again Producing Nice Returns for VC Funds

Australia’s Square Peg Capital investing $150 million in Israeli startups; Pixellot gets $3 million from Chinese investor.

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

Most venture capital funds are hesitant to disclose the return on investment that they produce, but return on equity data suggest that since 2010, venture capital funds that have invested in Israeli firms have seen an increase in profits from sales of those companies. In 2010 the funds earned about $1.80 on average for every dollar the funds invested in companies they later sold, but by 2014, they earned $3.50 per dollar invested, according to a report by the IVC research center and Israeli law firm Meitar.

The data don’t reflect the entire picture, but they do suggest a substantial improvement over the past four years. The figures also suggest that investments in the life sciences have not fared as well as money put in most other sectors. The most profitable exits were generally the ones for companies that were 10 to 15 years old. (Amir Teig)

Australia’s Square Peg Capital investing $150 million in Israeli startups

Square Peg Capital, an Australian venture capital firm with headquarters in the Melbourne area, has announced that it intends to invest $150 million in Israeli startups over the next three to five years. With that in mind, Square Peg has set up an office here headed by firm partner Dan Krasnostein, who recently moved to Israel from Australia. Arad Naveh, a former partner in Benchmark Capital, joined Square Peg as a partner in 2014, and brings with him a background in the Israeli and American markets. He was founder and CEO of Class Data, a software maker for quality-of-service solutions in IP networks, which he sold to Cisco in 1998. Unlike most venture capital firms, Square Peg was privately funded by its founders. It was established in 2012 by Australian businessmen Paul Bassat, who co-founded the online employment platform Seek; Justin Liberman, whose family has a history of investments in Israel, including Paz Oil and First International Bank of Israel; and Tony Holt, an investment banker. (Inbal Orpaz)

Pixellot gets $3 million from Chinese investor

Chinese search engine firm Baidu has invested $3 million in Petah Tikva-based Pixellot, which specializes in technology that facilitates the capture of video footage, the Israeli company has announced. The system produced by Pixellot, which is headed by CEO Ben Khoushy, includes the positioning of a multi-layered array of cameras at sporting or other events, making it easier to capture footage from the optimal vantage point. Beijing-based Baidu is reportedly China’s No. 1 search engine. (TheMarker)