Israeli tech donates stock options amid war to aid national recovery
Nonprofit Tmura seeks donations of small stakes in startups and then, when they become valuable, uses the cash to fund youth and education; looks to expand model to US investors
Sharon Wrobel is a tech reporter for The Times of Israel
When UK private equity firm Permira in May last year bought a majority stake in Israeli fraud protection firm BioCatch at a $1.3 billion valuation — as the country was still at war with the Hamas terror group — investors cashed in handsome returns. The deal also benefited Israeli youth, soldiers and victims of the October 7, 2023, onslaught, thanks to the sale of options worth $1.3 million, originally donated in 2015 by BioCatch to the nonprofit organization Tmura.
BioCatch is Tmura’s newest “communicorn,” joining seven other Israeli tech firms that have each donated at least $1 million to the nonprofit venture option grants. One of the main beneficiaries is Heroes for Life, an Israeli nonprofit that mobilizes post-army Israeli travelers for humanitarian projects in developing countries. Other communicorns include Waze, Outbrain and Riskified.
Founded in 2002 by New York-born venture capitalist Yadin Kaufmann, who immigrated to Israel in 1985, Tmura encourages tech entrepreneurs to support nonprofits focused on education and youth. Kaufmann told The Times of Israel that he joined Israel’s fledgling venture capital scene of the 1990s when the country was first becoming a “startup nation,” where he saw both huge wealth potential and the social disparities that were being wrought by the tech industry. He launched Tmura to find a way to channel some of the “newfound wealth to needier elements in Israeli society.”
Tmura approaches early-stage startups and other fledgling high-tech firms and, rather than ask for cash, seeks a donation of shares, options, or other stakes when such assets are not yet worth much. Typically, most startups give Tmura a stake of less than 1% in their firm via options.
Then, if and when an exit happens — either a sale to a larger company or an initial public offering of shares — Tmura cashes in on that equity, providing much-needed donations to a variety of nonprofit organizations mostly involved in helping out kids in need. Each donor company can decide which nonprofit organizations it would like its options proceeds to support.
Despite the challenging war period, political instability and the decline in foreign investment in the Israeli tech ecosystem, exit proceeds in 2024 totaled almost NIS 10 million ($2.8 million), the second-highest annual amount since Tmura was founded.
Apart from the BioCatch deal, other exits such as Bel Fuse buying a majority stake in Israel’s Enercon and Playtika snapping up Tel Aviv-based SuperPlay each contributed $400,000 this year though the sale of options. Other notable donors included tech firms Entitle, Rezonate, Seeking Alpha and Cartiheal.
“We were very fortunate to have a significant chunk of money that was put to work into the community during this difficult time and a lot of the donations in 2023 and 2024 went to address the immediate needs created by the war and all the displaced people,” said Kaufmann. “Everybody understands the impact this has had on youth and education.”
“So many of the nonprofits that we supported went into high gear and upped their activities to be able to meet these increased needs, and so the money was extremely important,” he added.
Kaufmann said that the donated funds by high-tech startups and firms in 2024 have helped charities and nonprofit organizations that focus on national resilience, rehabilitation and reducing social disparities.
Among the main beneficiaries were HaGal Sheli (My Wave), which teaches surfing to at-risk youths and helps treat people affected by trauma, individuals with PTSD and those with special needs; SAHI (Special Hessed Unit), which works with youth from evacuated families who have been in temporary housing for over a year; and Album Shakuf (The Transparent Album), which helps Israeli soldiers process combat experiences and with the transition back to civilian life.
In 2024, over 35 new tech companies joined Tmura, contributing stock options to the fund. The companies include Legit Security, Faddom, Arato, Guardz, Verax, Utila, Pecan, OpMed, Canotera, Briya, FalkorDB and Remepy.
“We enable companies to be philanthropic right at the very early stage of their development when they don’t have revenues, they don’t have profits, they don’t have much cash, but they do have equity or options, and just as they are offering them to hire employees, they think about giving a little bit for the benefit of the community,” said Kaufmann. “This helps them during those years before their exit to recruit and retain employees because the management and all the employees know that they are working not just for themselves, not just for their investors but for a company that gives back.”
Kaufmann said after more than two decades the organization is taking the model to the US to target Jewish investors and Americans who invest in Israeli companies.
The fund, named “A Good Option,” will solicit donations and pledges of equity from early-stage US tech companies, including their founders, senior employees and investors. The proceeds from eventual exits will support US Jewish and Israeli charitable causes, along with other nonprofits, and thereby strengthening the US Jewish community and its connection to Israel.
“Especially after October 7, a lot more American Jews understand the importance of community and want to make a positive impact on Jewish and Israel-related causes with the increase in antisemitism and what they are seen going on university campuses,” said Kaufmann. “Post-October 7, many young Jews feel the need to come together and work for their community as well as doing other things to support important causes including the fight against antisemitism, supporting Israeli life, and Jewish education.”
In the 23 years since its founding, Tmura has managed to get both VC funds and a total of 912 startups on board with its vision, generating some $34 million in proceeds from 185 exits over the years for hundreds of youth-related charities and nonprofit organizations in Israel. The charities include Heroes for Life; Krembo Wings, which provides weekly social activities for hundreds of young people with special needs; and Moona, set up by a former Israeli fighter pilot, aims to build bridges between Jewish and Arab Israeli youth through space technologies.
“The numbers are extremely impressive, and it’s fantastic that we have been able to do as much good but a lot of companies have not donated,” said Kaufmann. “We have missed many companies over the years and we want to get more of the future startups.”
