The Israeli-British venture capital fund 83North is raising a seventh fund for investments in young and mature start-up companies in the amount of 400 million dollars. Due to the global economic uncertainty and unlike previous fundraisings, the fund decided to combine investments in young and mature companies in one fund.
For comparison, in May of last year 83North raised two funds with a designation for investment at different stages for a combined amount of 550 million dollars. The group’s total raised capital currently stands at $2.2 billion.
Despite the difficulty of attracting investors to new venture capital funds these days due to the rise in interest rates which makes investing in risk-biased instruments less viable and due to the geopolitical uncertainty, the fund managed to raise capital from those limited investors who invested in the past.
A sequence of exits
According to the estimate, a series of exits in the past year and a half have brought the fund’s return to be included in a high percentage compared to the venture capital industry: due to the fear of an inflated economic bubble last year, the fund preferred to sell their holdings in companies that are preparing for an IPO, such as Iron Source, Pioneer and Marketa. Although the fund was not a partner, for example, in the giant merger of Iron Source, valued at 11 billion dollars, last year, but on the other hand, it spared itself the large decline in value in the public companies in the last year and a half.
In addition, the fund benefited from mergers and acquisitions of private companies for technology giants: it was a prominent partner in the sale of the delivery application Walt to the American Doordash for 8.2 billion dollars, in the sale of the Cyber Simplify company to Google for half a billion dollars in January, and was the only external investor in the mobile games company Beach Boom of Gigi Levy, which was sold at the end of last year for 275 million dollars to French Voodoo.
However, not everything is rosy in the fund: the information storage and backup company Zarto, which was previously considered one of the most promising in the portfolio, was sold for $374 million to HP – a not high amount in relation to the capital invested in it, about $180 million.
Most of the partners are Israeli, the investment policy is global
As far as we know, the limited investors in the fund have not changed. The foundation refuses to reveal their identity, but in the past the name of Princeton University’s endowment fund was published as a prominent investor. According to research firm PitchBook, other limited investors are Blackrock, Germany’s SAP and Cross Creek.
83North is a slightly different fund in the Israeli landscape: most of its partners are Israeli, but its investment policy is global – the company invests in startups in Israel, Europe, the UK and the USA. The fintech company Marketa, for example, one of the fund’s largest issues in the last year, is located in California, and has no connection to Israel.
The fund also advocates a limited structure: it has no more than four partners who do most of the work alone, without an advisory team: the Israelis Arnon Dinor, Gil Goren and Yoram Schnir and the British partner Laurel Bowden.