MAOR launches new USD200m fund II
Israeli active venture capital investor MAOR INVESTMENTS has launched MAOR II, a new fund aiming to raise USD200 million in funding from accredited/qualified European investors, with a focus on investing in promising Israeli tech startups.
MAOR INVESTMENTS was launched in 2018 to facilitate access to the Israeli tech ecosystem and related opportunities for European investors, in particular family offices. In three years, Maor has made its mark through unique positioning, drawing on cultural roots in both Israel and Europe. It provides a strong local presence spearheaded by an Israeli team based in Tel Aviv, whose network is a huge asset in startup sourcing. Maor has also forged a unique position in venture capital by actively bridging the gap to offer Israeli startups a gateway to European corporates.
The fund was created in the knowledge that Europe and Israel face the same challenge, which will be crucial to the industrial competitiveness and sovereignty of the two regions in the medium-to-long term: both need to offer their tech companies—most of which currently relocate to the United States—a local alternative to keep them at home and help them thrive.
Although Israel’s buoyant venture capital culture and entrepreneurial spirit have given the country a significant lead over Europe, both regions are increasingly seeing the same phenomenon: successful startups are mainly financed by American funds and mostly opt to move to the United States. Either they list on the Nasdaq or NYSE or are bought out by a US investor or tech group. In Israel’s case, there are two main reasons for this brain drain:
On the one hand, the main venture capital funds active in Israel are American investors, which very often push Israeli companies to move their headquarters to the United States, notably to simplify relations between their management teams and boards.
On the other, there are limited opportunities on the ground in the Israeli market, which leads Israeli startups to readily turn to the United States as their primary export country because it offers two advantages: a single language spoken throughout the region and an ability to reach the whole country from just one or two major cities.
The same trend is also gaining momentum among European tech startups, even though Europe potentially offers a larger area of business development than the United States. This is reflected in the record financing recently raised by American funds for investment in top French startups. To stem the tide and prevent promising young tech firms from flocking to the United States, it is crucial that Europe and Israel come together and take steps to protect their interests and their independence.
Since its inception, MAOR INVESTMENTS has sought to tackle this issue and rise to the challenge of cultivating closer ties between Israeli startups and innovation-hungry corporates, primarily in France, then across Europe.
The launch of MAOR II is another development milestone for MAOR INVESTMENTS, building on the success of MAOR I, which established a balanced, diversified portfolio including some of Israel's best startups. It follows the USD100 million in funds raised by MAOR I, which closed in 2019, with more than 75 per cent already invested in 18 startups across a wide range of sectors, including artificial intelligence, fintech, sportstech, real estate, construction, marketing, digital health, agriculture, cloud infrastructure and cybersecurity. In less than three years, MAOR I has already achieved one exit and one IPO for the startups in its portfolio, returning nearly 25 per cent of invested capital to its private backers.
MAOR II will target a very similar portfolio to MAOR I but will gain flexibility by raising twice as much capital. MAOR II will thus be in a position to actively target the largest funding rounds and step up its investments, acting as a lead investor where needed.
Israel offers a unique opportunity on the doorstep of Europe for the continent’s institutional investors and family offices, which are so far under-invested in private tech companies. Israel’s Silicon Wadi is just a four-hour flight away and offers a real alternative to Silicon Valley—one that is also much more accessible, with the prospect of tech and manufacturing partnerships that would bolster industries in France and across Europe to fend off competition from big US firms.