European venture capital firm closes $220m fund with focus on Israeli startups

European venture capital (VC) firm Forestay Capital announced on Wednesday that it closed its second fund at $220 million, with a key focus to invest in Israeli startups and help them expand in Europe.

“We have been committed to the Israeli tech market since our inception and we will continue to support Israeli tech innovation in the enterprise AI space for the long run,” Frederic Wohlwend, Managing Partner of Forestay Capital told The Times of Israel. “We believe Israel continues to produce some of the best technology and technical teams in the world and we are set to be the partner of choice in Europe for their scale-up.”

Founded in 2018 by Wohlwend, a former Global Chief Digital Officer of Serono and pharma giant Merck KGaA, Forestay was created as the enterprise software fund of B-FLEXION, the private entrepreneurial investment firm of the Bertarelli family.

With offices in Geneva, London, Jersey and Dublin, the venture capital fund specializes in making investments into early-growth stage startups and in helping founders bringing their products to market to foster business development.

The commitment to invest in Israeli startups comes as Israel is almost nine months into a war following the October 7 onslaught by Hamas, in which terrorists killed some 1,200 people in Israel’s south, most of them civilians, and abducted hundreds of others.

In response, the Israeli army called up hundreds of thousands of reservists to join the fighting, including thousands of employees of startups and tech firms. The call-up presents challenges especially for Israeli early-stage startups, who in the absence of key personnel, are struggling to run their daily operations and are grappling with attaining critical funding for their survival.

Frederic Wohlwend, founding and managing partner at venture capital firm Forestay Capital. (Courtesy)

Forestay said that the second fund will go toward 10 to 15 new investments of between $10 million to $15 million into startups in Israel and Europe in the fields of enterprise AI, data infrastructure, cybersecurity and process automation. It is backed by some of the largest family offices in Europe, including a partnership with Anaïs Ventures, the investment vehicle for certain members of the Firmenich family.

Forestay said that for the second fund, it has already started to allocate capital partnering with three companies, including Israeli cybersecurity startup Veriti, and Swiss engineering intelligence startup Neural Concept.

For the venture capital firm’s first fund, Forestay backed 13 companies of which three reached unicorn status – valuation exceeding $1 billion – and two were acquired. The fund’s portfolio includes three Israeli startups – Fornova, vCita and K2view – as well as cloud storage startup Wasabi, Nexthink, and smart data startup Scandit.

“In recent years, K2View was courted by several world-class VC and PE brands,” said K2View founder and CEO Achi Rotem. “We turned them all down – until we met Forestay; even before closing the Forestay team introduced us to senior executives at tier-1 potential customers, demonstrating not only a strong belief in our offering, but more importantly, putting their own network on the line.”