TAU launches $20m. academic VC fund in Israel
Tel Aviv University is launching the first ever academic-based venture-capital fund in Israel, the school announced on Sunday. It has raised some $20 million in commitments, reports said.
Similar to funds set up by some Ivy League schools, along with MIT and Stanford, the groundbreaking TAU fund will host incubation programs in a variety of tech fields, including cybersecurity, in an attempt to encourage investors to invest in start-ups founded primarily by students or alumni.
The fund will focus on investing in early-stage startups and operate in a typical seven-year cycle, with plans to dole out investments in the first four years. Its first partner to invest in the venture is NEC, the Japanese IT giant, which will focus on cybersecurity.
“This is a new model that has been implanted for the first time in Israel, and it sets the university in line with the leading universities in the world,” TAU president Prof. Josef Klafter said in a statement. “By doing so, the university will contribute among others to the future of the State of Israel, and to its establishment as a Start-Up Nation.”
Other investors in the fund include anchor Singaporean investment fund and the Chartered Hi-Tech Fund. Other sponsors include investors from the US and Canada.
Selected to lead the investment fund is managing partner Nimrod Cohen, formerly a partner at Plus Ventures who led investments in blockbuster companies such as YOTPO, Bringg, Ciamgine and WSC Sports, which was later sold to Snapchat, among others.
In setting up the VC fund, Cohen touted entrepreneurs’ access to TAU students and an alumni network. It will also offer start-up founders access to university resources, the premises and social networks.
Given that funding for early-stage Israeli start-ups has shrunk in recent years, while overall investment for later-stage companies has soured, according to the IVC Research Center, the TAU fund could come at an opportune moment for fledgling companies that seek investors.
The venture-capital fund will be located on TAU’s Ramat Aviv campus in its Miles S. Nadal Home for Technological Innovation and Entrepreneurship compound.
The fund is separate from TAU’s technology transfer arm, named Ramot, which helps commercialize academic research but does not inject equity into start-ups.
“We made this investment out of a strong belief in the Israeli hi-tech industry in general, and from knowing that a big part of entrepreneurship in Israel surrounds Tel Aviv University,” said investor Eyal Agmoni, the head of Chartered Hi-Tech Fund.
Israel ranks first worldwide in terms of enjoying the most amount of venture-capital money investment per capita.