Israeli venture capital fund Symbol closes $50 million debut fund

Fund invests in ‘pre-consensus’ Israeli-founded entrepreneurs pitching ideas outside the tech spotlight; founder shares investor concerns about domestic political uncertainty

Sharon Wrobel is a tech reporter for The Times of Israel.

Team at Tel Aviv-based venture capital fund Symbol. (Courtesy)
Team at Tel Aviv-based venture capital fund Symbol. (Courtesy)

Symbol, a Tel Aviv-based venture capital fund that focuses on very early-stage investments into startups founded by Israeli entrepreneurs, announced on Tuesday that it has closed its inaugural fund raising a total of $50 million.

Established in late 2021 by Yuval Ariav, co-founder of financial tech unicorn Fundbox, the fund specializes in making first-check investments to foster startups and entrepreneurs, which are at a stage where they have a team and an idea in unconventional or “pre-consensus” fields deemed too risky, or complex for traditional early-stage investments.

The fund plans to make 14 to 16 investments of between $500,000 to $3.5 million each helping Israeli founders pitching unconventional or niche ideas build their startup from stage zero when they are still struggling to raise their initial capital.

To date, the fund has already made 10 pre-seed and seed investments, including in Sightful, which has developed the world’s first augmented reality laptop; in cargo insurance startup Breeze; in fintech startup Nilus; and in Jiga, which has developed a manufacturing procurement platform. Five startups in the Symbol portfolio have secured additional funding and two are alumni of the Y Combinator accelerator.

“We started the fundraiser in 2021 with the world still reeling from COVID through the markets turning in 2022 and did the closure with all the political uncertainty that’s in Israel now,” Ariav told The Times of Israel. “It is not trivial that during these times, we were able to raise a fund.”

Although Ariav did not disclose the names of the investors in the fund, he said that they included a couple of US-based VC funds, some European and very few Israeli investors, as well as executives from major global American companies in finance, banking, retail, real estate and in hospitality.

Symbol venture capital fund founder Yuval Ariav. (Courtesy)

Ariav recounted that towards the closure of the fundraising, the uncertainty around the advancement of the widely contested judicial overhaul, raised questions among some foreign institutional investors about how it might affect both the fund and more strategically, how it might affect their approach to investing in Israel and Israeli-founded companies.

“They ended up investing,” Ariav said. “A lot of them ask questions around the general trajectory of whether Israel is going to be something like Hungary or Poland, and what that means, others ask more concrete about what the legal framework is going to look like, or whether we are going to see talent migration out of Israel.”

“They are all valid concerns in these very turbulent and uncertain times but fundamentally the core, ecosystem is very strong and therefore in the short term, we are not going to see a lot of impact, but I think in the medium and long term, the most potentially impactful actions on investor sentiment are still ahead of us, such as a change of the credit rating score for Israel,” he added.

Ariav said that investors have recognized that the local tech ecosystem has been quick to act in recent months, as close to 100% of Israeli startups now incorporate in the US versus 60% before the political turmoil.

“Israeli companies are built to be successful globally, because the market here is too small and I think in a way, that’s a hedge against anything that’s happening here in the short term,” he remarked.

Ariav, a 15-year tech investor and veteran, who served 10 years in the Israeli military intelligence, said he has had a soft spot for unconventional tech fields since his early days when he struggled to raise capital for his ventures.

“I was a founder of a company that was well outside of the VC consensus, and it was extremely challenging to raise funds for our first round,” Ariav said, referring to his experience with Fundbox. “This sparked a decade-long interest in great ideas that similarly don’t tick all the VC boxes.”

As an angel investor, Ariav in the past participated in the first funding round of chip-software unicorn Next Silicon, where he serves as a board member, and in the seed round of procurement automation startup Approve, which was acquired by Tipalty.

“I sat in the founder’s chair, and I know firsthand that there will be moments in which things will go completely off track and it will seem like nothing is going according to plan,” he said. “That’s part of the deal. We are here to embrace these ‘oh shit’ moments alongside founders, knowing that these are the exact moments from which strong, resilient companies are built.”

Symbol’s investment interest is very broad or sector agnostic while staying away from popular tech areas such as cyber.

“What we really care about is the Israeli DNA in the founder so we invest in Israeli founders, but we are pretty agnostic to where they are,” said Ariav. “I think Israelis have a special grit and chutzpah and a lot of the times they have an outsider’s advantage when they go into established global and US sectors.”

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