The Tel Aviv-based venture capital firm TLV Partners announced on Monday that it had raised $250 million in new funds to invest in innovative Israeli-founded early-stage startups.
The $250 million marked the firm’s fifth fund, TLV Partners V, and took its assets under management to $1 billion. The fund will invest in early-stage startups founded by outstanding Israeli entrepreneurs, focusing on sectors such as developer tools, AI, cybersecurity, fintech, and biotech, the VC firm said.
TLV Partners is planning to use the raised capital of the fifth fund to make about 25 seed and Series A investments, initially in the range of $4-8 million each, and in subsequent rounds could back as much as $20 million per startup.
TLV Partners was founded in 2016 by entrepreneurs and venture capitalists Rona Segev and Eitan Bek, formerly with Israeli VC firm Pitango. They are joined by Shahar Tzafrir, previously with Magma Venture Partners, as managing partners, and Adi Yarel-Toledano, also formerly with Magma, as partner and chief financial officer. The firm has invested in 60 startups and is one of Israel’s most active VC firms.
The announcement of the fifth fund comes as the global tech crisis, combined with local political uncertainty, has in recent months brought deal-making to an almost complete halt. The slowdown in investments and lower technology valuations have forced some private equity and venture capital firms to cut the target of the size of their funds.
The number of first investments by the 10 most active venture capital funds in Israeli technology firms in the first quarter of this year dropped to the lowest level since at least 2015, according to report published by IVC Research and law firm Gornitzky GNY last month.
The 10 most active VC investors, which in 2022, accounted for 58% of total funds raised, made only three initial investments – when a VC fund adds a company for the first time to its investment portfolio – in the first three months of the year versus 30 during the same period in 2022, the data showed.
For the VC industry, 2022 still marked the second-best year with 56 Israeli VC firms raising $4.5 billion, a 15% decline from the $5.6 billion record of 2021. The 10 most active investors in 2022 focused on early seed and Series A financing rounds mainly investing in cybersecurity and fintech firms.
“As we navigate turbulent times in Israel, our commitment to our founders remains unshakeable,” said Tzafrir, managing partner at TLV Partners. “We view these challenges as opportunities to innovate, build, and strive.”
“Our announcement of Fund V, part of our $1 billion funds, underscores our unwavering optimism in our founders, our nation, and the promise of a resilient democracy,” Shafrir added.
Earlier this year, TLV Partners joined a flurry of top executives and finance firms in a warning that the judicial overhaul planned by the right-wing coalition government threatens democracy and is poised to harm the thriving local tech industry. The planned changes to the country’s justice system could force the best minds to leave and local tech entrepreneurs to create startups outside of Israel, the VC cautioned.
“We are here, we are ready, and we stand strong – together,” said Shafrir.
The firm announced its first fund of $110 million in 2016, followed by a $150 million fund in 2018 and a third fund of the same amount in 2020. Added to that third fund was a $60 million growth fund for existing founders. In 2021, it launched a fourth fund of $220 million to back new ventures and additional $100 million initiative to support portfolio companies and founders.
The startups TLV Partners has invested in have raised more than $4 billion and employ more than 4,000 people. Its portfolio companies include Israeli AI medical imaging company Aidoc, insuretech firm Next Insurance, data tech startup Datagen, and Quantum Machines, the developer of a standard universal language for quantum computers and a unique platform that helps them run.
“The success of our portfolio companies extends far beyond financial investment. It is built upon a genuine partnership rooted in trust, transparency, and shared vision,” said Toledano, general partner and CFO at TLV Partners. “We consider ourselves privileged to have backed 60 exceptional companies and 130 outstanding founders whose success remains our foremost priority.”
“We are honored to work alongside them in realizing their bold ambitions,” said Toledano.
Since its inception, 10 of the startups TLV Partners has invested in have-seen exits, including Israeli computing tech startup Granulate, acquired by US semiconductor giant Intel; Israeli marketing analytics company Oribi, bought up by Microsoft’s LinkedIn; global real estate giant JLL, snapped up by Israeli analytics firm Skyline; and freelance management platform Stoke Talent, acquired by freelance work marketplace Fiverr.