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Digital Horizon launches USD200m venture fund

Digital Horizon, a venture fund and venture builder investment company, has launched its second venture fund with a target volume of USD200 million. 

The first fund, which opened in 2019, is completing the investment stage and has so far returned 40 per cent per annum to investors. Its portfolio contains more than 20 companies including Klarna, team management platform Monday.com, data streaming platform Ably, retail analytics platform Trax and InsureTech companies Cuvva and Obligo.

Digital Horizon’s new fund will retain the successful strategy of its first. 

This includes a specific focus on the fintech and corporate software sectors. These are some of the fastest growing segments in venture capital. The volume of investments in fintech in Q1 2021 reached USD98 billion, twice more than in the same period of 2020. Spending on corporate software, according to Gartner’s forecast, in 2022 will grow by USD70 billion in 2022 to USD699 billion.

Digital Horizon has significant expertise in these sectors. The company has successfully invested in American, Israeli and European startups, and has also built technology businesses from scratch in Russia and the UK.

Unusually for venture capital funds, Digital Horizon will adopt a multi-stage approach and invest in companies at all stages of the startup cycle. This approach has generated high returns over a long period of time with the first fund.

Digital Horizon is particularly focused on startups founded by passionate immigrant entrepreneurs with a clear vision and strategy. In 70 per cent of Digital Horizon’s startup investments, the founders were building their business not in the country of origin.

“We are delighted to launch our second fund, following an oversubscribed first fund,” says Alan Vaksman, the Founder and Managing Partner of Digital Horizon. “In our first fund we moved away from the traditional venture approach and invested in companies at various stages from Round A to D. Investing in early stage startups can mean double-digit multiples, but this is “long” money, locked in for seven or more years. In later stage investments, the return on investment occurs in just one or two years, but growth slows to an average of 2-4x. A multi-stage fund provides high returns while enabling the investors shorter investment horizon and liquidity. Our new fund will adopt the same approach.

“As an investment company which combines venture fund and venture builder teams, our team has a unique combination of investment and product building expertise. This allows us to comprehensively evaluate businesses that we are considering adding to the portfolio from both a financial and technical point of view, in a way that others cannot.

“We firmly believe in migratory talents and their abilities to build best-in-class solutions which drive economies forward,” adds Vaksman. “We are extremely proud of the success of our first fund and are confident that our investment strategy will be just as successful going forward.”

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