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Britain sets up ‘VC club’ to boost investor activity in Israel

UK investments account for only 3% of $10 billion raised by Israeli startups in 2020, ‘leaving UK investors behind’; new invite-only forum aims to close gap with closer ties

Shoshanna Solomon is The Times of Israel's Startups and Business reporter

Illustrative image of UK's and Israel's national flags (Maksym Kapliuk; iStock by Getty Images)
Illustrative image of UK's and Israel's national flags (Maksym Kapliuk; iStock by Getty Images)

The UK-Israel Tech Hub at the British Embassy, in partnership with the law firm Taylor Wessing, has launched a “VC club,” an invite-only collaboration forum of VC funds from the UK and Israel that will seek to boost bilateral ties and shared business intelligence between the parties.

The initiative comes as UK investors are seen as missing out on investment opportunities in Israel. According to IVC research Centre’s 2020 report, UK investments accounts for only 3% of the some $10 billion invested in Israeli startups in 2020, “leaving UK investors behind in the market share,” the embassy said in a statement. By comparison, US investors account for 35% of the total market share, the statement said.

On the other hand, there is growing demand from Israeli investors wishing to access investment opportunities in the UK, the statement said.

The new club will seek to increase the UK’s market share in investments in Israeli startups and help Israeli investors identify opportunities in the UK technology market. The initiative comes as the European Union has also underlined that it is punching below its weight on the Israeli tech scene. A first-of-its-kind report by the European Union published earlier this year showed that EU firms and investors are also “disproportionately small” players in the Israeli tech scene.

British Ambassador to Israel Neil Wigan (Courtesy)

“The UK-Israel Tech Hub identified the need to provide UK and Israeli VCs and investors exclusive access to start-ups from both ecosystems by building an exclusive and collaborative platform for both countries to exchange knowledge and business intelligence on investment opportunities,” the statement said.

The UK Israel Tech Hub, a UK government unit set up in 2011 at the British Embassy in Tel Aviv, aims to promote economic growth in both countries by partnering British companies with Israeli innovation.

“With the UK being both the number one destination for Israeli entrepreneurs in Europe and the second-largest foreign investor in Israel, we know investors on both sides want to step up engagement,” said British Ambassador Neil Wigan. The program will help “promote familiarity and trust-based relationships.”

The UK Israel Tech Hub has strong ties with the Israeli ecosystem across different industries: fintech, cyber security, healthcare, smart cities and mobility, as well as a variety of societal initiatives including climate change and diversity.

The new VC club will aim to create opportunities for UK investors to better access the startup deal flow coming out of Israel, create relationships between like-minded VC investors from both countries, identify strategic opportunities for Israeli VCs in the UK ecosystem, and provide opportunities for knowledge sharing on market trends and business intelligence between UK and Israeli VCs.

To do this, The UK-Israel Tech Hub will become a place for information and communication between investors and VCs and will seek to promote one-on-one meetings between investors, founders and VCs from both countries. The British Embassy will hold online and live events for investors and VCs from both countries, and the VC club will hold an annual summit bringing together the club members, founders and investors.

Avi Eyal, co-founder and managing partner at Israeli VC fund Entrée Capital and a VC club member, said that there is “a tremendous wave of digitalization and innovation” that is happening both in Israel and the UK.

“The proximity to Israel, similar legal systems, and English as the default spoken language all help to break barriers to doing business together,” he said.

The UK VCs invited into the club are:
• Playfair Capital
• Remagine Ventures
• HSBC Ventures
• Anthemis
• Clean Growth Fund
• Bethnal Green Ventures
• Notion
• True
• Hearst Ventures
• Downing Ventures
• AXA Venture Partners
• Mosaic Ventures
• Seedcamp
• Local Globe
• Oxx
• Sustainable Ventures

The Israeli VCs invited to the club are:
• Hetz Ventures
• Entree Capital
• OurCrowd
• Collider Ventures
• Discount Capital
• Qualcomm Ventures
• StageOne Ventures
• Maniv Mobility
• Rhodium
• 10D
• JVP
• HP Tech Ventures
• Israel Growth Partners
• Viola Fintech
• Lool Ventures

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