Israel

New $80 Million Israel-Korea Fund

Posted on by Techtime

Photo above: Jon Medved, CEO of OurCrowd

 OurCrowd was recently selected by the South Korean government to co-manage a bilateral investment fund that will invest in startups in both countries. The fund’s target is $80 million, $48 million of which has already been raised by the Korean partners of the fund: NH Venture Investment and by Korea Growth Investment Corporation (K-Growth), an agency of the Korean government. OurCrowd is currently raising funds from its over 240K registered investors worldwide.

The fund is jointly managed by NH Venture Investment and OurCrowd General Partner as co-GPs. It will invest in 25-30 startups in both countries that focus in core technology sectors, such as semiconductors, robotics, automotive, quantum computing, cybersecurity, digital health, and more. Jon Medved, CEO of OurCrowd, said that apart from the fund’s investments, “Israeli DeepTech companies will receive direct access to the South Korean industrial giants and will be able to forge collaborations on a global scale. “

South Korea’s economy is the 13th largest in the world and the fourth largest in Asia. Its gross domestic product grew by 4.1% in 2021. South Korea is also the 5th largest industrial manufacturer in the world after China, the United States, Japan, and Germany, and the world’s #2 investor in R&D as a percentage of GDP (#1 in this category is Israel). OurCrowd is an online global venture investing platform consists of over 240,000 registered members from 195 countries.Founded by CEO Jon Medved in 2013, OurCrowd has grown rapidly into the world’s leading position with 440 portfolio companies and over $2.3 billion in commitments as of 2024).

Judicial reforms weaken Israel’s Technology Ecosystem

Posted on by Techtime

photo above: Anti-government demonstration in Tel aviv last month. Photo: Techtime

A major judicial reform planned by the elected government to reduce the power of the supreme court, and widespread civil resistance to this reform, are shaking social stability in Israel. Now it begins to take its toll on the local technology sector, the acclaimed jewel in the crown of Israel’s econoy. A new report published by Start-Up Nation Central, reveals the scope of the crisis in the Israeli High Tech sector.

The July 2023 survey questionnaire was completed by 734 professionals, representing 521 companies: 119 investors and 615 respondents from Startup/tech companies. The findings are dramatic especially when it comes to relocation plans: 68% of Israeli startup companies have begun taking active legal and financial steps, like withdrawing cash reserves, changing HQ location outside Israel, relocation of employees and conducting layoffs. Among them, 22% of companies have alredy diversified cash reserves outside Israel and 37% of investors say companies in their portfolios have withdrawn some of their cash reserves and moved them abroad.
Relocation is a serious and slow process: 8% of companies report that they have already begun the process of changing HQ locations, and 29% reported their intention to do so in the near future. 20% of investors note that companies in their portfolios have begun changing HQ location and 69% of investors noted that companies in their portfolios intend to do this in the future.

Looking for recovery signs

The current political instability is also shaking the local VC industry: Investments outside Israel are growing as a component in Israeli VC investment strategy, and. 67% of investors are investing or are considering to invest in foreign companies. While 65% of investors already see signs of recovery in the US venture capital market or believe they will see them in the coming six months, only 12% of investors in Israel, observe this trend.

Ireversible process

The report is troubleing because tecnology is the leading and most important sector of the Israeli economy. The CEO of Start-Up Nation Central, Avi Hasson, said: “Companies and investors are taking active steps to move activity away from Israel and this behavior has increased significantly over the past three months.” He said that the damage may deep and hard to recover: “Concerning trends like registering a company abroad or launching new start-ups outside Israel will be hard to reverse.”