Wix.com, Ltd., a Tel Aviv-based do-it-yourself website development company, is setting up its own venture capital arm to invest in startups that are focused on the web and seeking to help business get an online presence.
Wix Capital will seek to invest in seed and early-stage software and technology companies that operate at the intersection of online design and development, commerce and business management, and AI and automation solutions, Wix said in a statement on Wednesday.
The firm did not disclose how much money it plans to allocate to its venture arm for the purposes of investment.
“It is flexible, it depends on the needs,” Lior Shemesh, Wix chief financial officer, said in a phone interview. Shemesh will be leading the fund’s investment efforts. The funds for the venture arm will come from Wix’s own cash flow, he said, although other investors expressed interest.
The idea is to invest in startups that have activities that are affiliated and complementary to those of Wix and in those verticals that Wix understands, he said, including security, e-commerce, payments. The investments will allow Wix to stay tuned to latest developments in the market and eventually lead to mergers or acquisitions of the most relevant companies.
Investment size will vary, from hundreds of thousands of dollars to a few million, he said, with Wix seeking stakes in the startups that will enable it to make an impact on the firm. The investment amount and stake will depend on the company and on the relevance of the startup, he said.
“We are not just looking for an exit,” he said. “We can learn from the technology, fit it within our Wix ecosystem, align it with the purposes of the company.”
Wix, whose shares are traded on the Nasdaq and has a market capitalization of $14 billion, has over 182 million users worldwide and more than 4,000 employees globally. The firm hopes the knowledge it has gleaned over the years and the relationships it has built can be passed on to other entrepreneurs and founding teams to help them grow their startups, the statement said.
“The Wix team understands building a world class team while keeping a strong start-up culture,” said Shemesh, in the statement. “Launching Wix Capital will help us stay on top of emerging trends in our fields,” as well as provide support to companies that see Wix as a model of growth for their own firm.
Wix Capital has already made some investments for a total of over $5.6 million into several companies including Spike, which has developed a communication and workflow tool and which announced in June an $8 million Series A investment round in which Wix participated.
Oriente, a digital fintech company in which Wix Capital invested, provides Wix additional knowledge on financial services in emerging Asian markets.
Another investment Wix Capital has made is in Modalyst, a developer of a dropshipping platform. Dropshipping is an order fulfillment method that does not require businesses to stock up on products. The firm sells the product but it is shipped by a third party supplier. Investment in the firm provides Wix with insights into the fast-growing segment of e-commerce, the statement said.
Wix Capital also invested in RestAR, a 3D and AI product visualization tool, to gain more knowledge of ways that merchants and advertisers can increase conversion online.
The investments will not be limited to Israeli startups but global technologies as well, he said.
Wix’s headquarters are in Tel Aviv with offices in Austin, Beersheba, Berlin, Cedar Rapids, Denver, Dnipro, Dublin, Kyiv, Los Angeles, Miami, New York, San Francisco, São Paulo, Tokyo and Vilnius.