Japan’s Softbank buys $25m stake in Israeli investment firm OurCrowd

Companies will work together to explore joint investment opportunities, source deals, evaluate market trends, says OurCrowd’s Jon Medved

Ricky Ben-David is The Times of Israel’s Startups and Business editor and reporter.

A woman walks past a SoftBank mobile store in Tokyo on August 11, 2020 (Kazuhiro NOGI / AFP)
A woman walks past a SoftBank mobile store in Tokyo on August 11, 2020 (Kazuhiro NOGI / AFP)

Israeli crowdfunding firm OurCrowd said Wednesday that Japanese investment giant SoftBank, one of the biggest venture capital investors in the world, is buying a $25 million in the company that will go toward expanding the OurCrowd platform and building its investor base.

Softbank and OurCrowd also entered into a strategic cooperation agreement to source investment opportunities through SoftBank Investment Advisers (SBIA – Sub-Adviser to SoftBank Vision Fund 2), a wholly owned subsidiary of the company, to evaluate market trends in a variety of sectors including AI, quantum computing, mobility, agriculture tech, cybersecurity, and health tech.

The collaboration will also see OurCrowd and SBIA support geographic expansion across their respective ecosystems, according to the announcement.

SoftBank’s Israel operations are headed by Yossi Cohen, who stepped down as head of the Mossad in June after more than five years on the job.

“We have known Softbank for some time and have made investments in some of the same portfolio companies,” said OurCrowd founder and CEO Jon Medved in an email interview with The Times of Israel. “This current announcement came about as a result of a mutual desire to cooperate together more fully and effectively, thus the investment has both a financial and strategic element.”

The deal makes SoftBank, which has over $340 billion in assets under management (AUM) worldwide, a minority shareholder in OurCrowd and the parties will have regular interaction as they cooperate strategically, Medved said.

OurCrowd CEO and founder Jon Medved in Jerusalem (Courtesy)

SoftBank has invested in some of the biggest companies in the world, including Uber, DoorDash, Cruise, Slack, ByteDance (the precursor to TikTok) and — famously — in Israeli co-founded company WeWork. It has also made a number of investments in other Israeli firms including visual AI company AnyVision, cybersecurity firm Cybereason, and social trading platform company eToro.

“SoftBank has an unrivaled portfolio, a tremendous track record, and a great team,” Medved said Wednesday afternoon in a press briefing following the announcement. “Together we will explore joint investment opportunities, source deals, evaluate market trends and frontier areas of tech like AI, and quantum computing, and help each other work on geographic expansion.”

This month, OurCrowd was named as the most active venture capital investor in Israel by research firm Pitchbook, amid a record funding year for the local tech ecosystem so far. In the first three quarters of 2021, Israeli companies raised $17.78 billion since the start of 2021, almost double the total raised in all of 2020, itself a record year.

Head of the Mossad Yossi Cohen speaks at a cyber conference at Tel Aviv University on June 24, 2019. (Flash90)

OurCrowd said it has achieved record growth this past year with newly registered subscribers soaring from 25,000 in 2020 to 75,000 in 2021 so far, representing 300% growth. New investments made this year on the platform will exceed $500 million, a 100% increase in additional annual AUM, the company said. OurCrowd has invested in over 50 companies that have achieved exits including Israeli insurance tech company Lemonade, plant-based protein company Beyond Meat, and Uber.

Medved said the company hopes to “further expand our member/user base from 140,000 to millions of members” in the future, “grow our assets under management, our global footprint in leading companies, and our ability to offer new investment products both within venture capital and beyond

He added that the company also hopes to further develop its digital platform “by adding elements of AI and creating more value for our companies and our investment community through realized network effects.”

Medved said that, at the moment, OurCrowd was “hunting deals all over the world” with about 50 percent of its activity in Israel.

“To team up with such a leader in the venture market as an investor and partner will have a great impact on OurCrowd and its portfolio companies,” he said.

“Softbank has been investing ahead of major technology trends for over 40 years and we believe there is huge, embedded potential in the private markets ecosystem,” Cohen said in a statement. “In OurCrowd, we have an investment partner with the networks and pedigree to help promising Israeli startups to potentially emerge as international tech champions.”

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