After a five-fold jump in value, the Vertex fund realizes holdings

by time news

Venture capital fund Vertex Israel is realizing $ 160 million in holdings from its number four fund, which began investing in 2014. The fund sells about a third of its holdings in the fund’s existing portfolio companies, in a procedure called Strip Sale, in which a strip from the fund is sold. The buyer of the holdings is the American investment giant StepStone.

Vertex Fund Four has invested $ 144 million in Israeli start-ups in the initial phase. According to Yanai Oron, managing partner at the Vertex fund, the total value of the same investments in the fund’s books is about five times the initial amount invested – that is, about $ 720 million.

Out of this holding, Vertex has already returned $ 150 million to investors in Fund Four (LP), following exits in companies such as Dynamic Yield (which was sold to McDonald’s for $ 300 million), Argos (which was sold to German Continental for $ 450 million) and Invis (Which entered the Nasdaq this year in a $ 1.4 billion merger of Spock).

Following these transactions, the holding fund remained at approximately $ 570 million on paper, of which Vertex currently sells $ 160 million. The holdings sold are in companies such as Exonius, which raised last year at a value of about $ 1 billion; Verbit, which last year raised $ 2 billion; OwnBackup, which also raised about $ 3.3 billion six months ago; Yotpo, whose most recent fundraiser was valued at $ 1.4 billion, and is slated to go public this year. The deal also sells holdings in Data Rails, which was selected as Globes’ promising start-up in 2021.

Vertex’s high returns reflect the success experienced by venture capital funds, and especially funds that invest early in start-ups, following the surge in the technology world of recent years that has jumped the value of promising start-ups. Vertex will continue to actually manage the investments and sit on the boards of the start-ups and most of the success fees you will receive from the transaction, it invests back in the new StepStone fund, where the sold holdings will be held.

The option of selling a strip is relatively new but gaining popularity in light of the big money looking for technological investments in the private market. Last year, the Israeli Kumara Fund also sold $ 80 million in holdings to the same StepStone in a similar proceeding. “We gave our investors the option to sell a third of the holdings and everyone agreed. It is a tool designed to reduce risks and reduce pressure to sell all the holdings in companies,” says Oron.

Vertex is one of the oldest and most active venture capital funds in Israel. Vertex was founded in 1997 and has raised $ 1.2 billion to its various funds to date. Vertex is currently investing from its sixth fund.

You may also like

Leave a Comment