SoftBank takes stake in Israel’s OurCrowd venture capital firm

SoftBank has invested $25 million in an Israeli venture capital platform called OurCrowd in exchange for an undisclosed stake in the company.

The Japanese tech giant’s investment, announced Wednesday, is being made through SoftBank’s Vision Fund 2. Both companies have signed a “strategic partnership” as part of the deal.

Founded in 2013 and headquartered in Jerusalem, OurCrowd’s platform aims to give institutions and accredited investors access to vetted venture capital investment opportunities that they might not otherwise be able to find.

“We’re going to be exploring joint investment opportunities and helping each other source deals,” OurCrowd founder and CEO Jon Medved said on a media call Wednesday.

“We’re going to be working on evaluating and understanding market trends and the frontier areas of technology, whether it’s quantum computing or artificial intelligence,” he added.

When CNBC highlighted that SoftBank’s $25 million investment is relatively small compared to some of its other multibillion bets, Medved said: “SoftBank makes a lot of investments … some of them smaller than $25 [million], some of them a lot larger than $25 [million]. But for us, we’re really not counting the money. We’re much more interested in focusing on the strategic importance.”

OurCrowd says it has deployed over $1.8 billion into some 280 portfolio companies and 30 funds across five continents. It claims to have signed up 140,000 investors to its platform and it is Israel’s most active venture investor, according to VC research firm Pitchbook. This means OurCrowd has made the most deals in Israeli-based start-ups year-to-date.

The firm has backed companies like mobility start-up Jump, which was sold to Uber, and meat alternative start-up Beyond Meat, but it is yet to invest in a company that has exited for more than $10 billion.

While Israel doesn’t have tech giants on the same scale as the likes of the U.S. and China, the relatively small country, which has a population of around 9 million, has developed a reputation for being strong in tech.

Almost $18 billion was invested into Israeli start-ups in the first nine months of 2021, according to data from research firm IVC, and there are 72 Israeli companies worth over $1 billion, according to local tech network TechAviv.

“Everybody is debating whether Israel will create companies that are worth $50 billion or $100 billion,” Medved said.

Medved said SoftBank has a “very interesting and growing presence” in Israel, which is home to sizeable Apple, Facebook and Google outposts.

In July, SoftBank hired former Mossad boss Yossi Cohen as the head of SoftBank Investment Advisers’ operations in Israel.

Cohen said in a statement Wednesday that “there is huge, embedded potential in the private markets ecosystem.”

He added: “In OurCrowd, we have an investment partner with the networks and pedigree to help promising Israeli startups to potentially emerge as international tech champions.”

SoftBank has invested in Israeli-founded firms including AnyVision, eToro, Redis Labs and Trax, according to PitchBook.