Israeli Startups Want More Cash but With Lower Valuations During Covid-19 Era, Says VC Partner
CTech – Because of the coronavirus (Covid-19) pandemic, Israeli startups are looking for additional cash reserves, and are willing to give up more of their company’s equity to get it, Victor Orlovski, the founder of Fort Ross Ventures said in a Monday interview with CTech.
“Entrepreneurs are looking to raise twice as much cash as before while diluting their own stake in the company, so that works for investors,” Orlovski, who also serves as the managing partner of the venture firm, explained.
Fort Ross Ventures is actively looking for more startups to back, he said. “Because of the current situation, we may enter into more competitive spaces now, so we are trying to take advantage of this momentum,” he added.
The firm is currently investing out of its second fund, which raised $235 million in commitments, he said. Out of that fund, the firm has $110 million that it has yet to invest, Orlovski said. The firm invests primarily in mid-stage startups.
“Fintech will be one of the leading fields to be accelerated during these times as people are moving online with unprecedented speed. We are also heavily investing in property technologies, we like everything related to software enterprises and deep-tech, cloud computing, and tech-enabled startups,” he said.
Earlier this year, Fort Ross Ventures announced the appointment of Sharin Fisher, a former cyber-intelligence officer at Unit 8200 — the Israeli military’s equivalent to the NSA and British GCHQ — as a partner to help identify cybersecurity, big data, artificial intelligence, and fintech startups in Tel Aviv.
“Israel was a natural choice for us, there are a lot of connections here,” Orlovski said. “Israeli entrepreneurs are usually positioned to go global, and that is one of the most important characteristics of Israeli startups.”
Orlovski said Fort Ross Ventures avoids investments in energy tech, consumer electronics, biotech, or life science startups.
The firm has previously invested in quite a few Israeli startups including New York-listed cybersecurity company Tufin Software Technologies, financial trading company eToro Group, cybersecurity company ThetaRay, enterprise software company Kryon Systems, and web personalization company Dynamic Yield. Last year, McDonald’s Corporation signed a deal to acquire Dynamic Yield for an estimated $300 million.