from the January 2008 issue

Jerusalem Global starts $200m. tech fund

Jerusalem Global Ventures said it has launched a $200 million equity fund that will invest in private Israeli-related technology companies.

JGV said in a statement the new fund's closing will be in April of 2008. It will invest in technology companies that "are on a trajectory to an initial public offering within three years and have a proven business model."

It said investments will be $5 million to $20 million in companies with late-stage financing needs of $10-$50 million.

"There are some interesting things going on in Israeli technology," Shlomo Kalish, JGV's founder said. "The number of private companies with revenue of more than $10 million has exploded and we see more in the pipeline.

"There is still pressure for such firms to exit too early. This fund will help successful companies bridge that gap and get to a point where they can realise their full value," he added.

Kalish pointed to Mellanox (MLNX.O) as an example of a firm the fund will invest in. Mellanox, a JGV portfolio company, earlier this year raised $102 million in a Nasdaq IPO.

Venture capital funds have said that in contrast to quick exits of just a couple of years for Israeli tech firms that took place prior to the bubble bursting in 2001, exits now will be taking longer and companies will need to show actual revenues. Israel's biotechnology sector at a glance Israel's share of sales in the global biotechnology market is about 2.5%. Israel ranks as a top country for scientific publications per capita; almost 60% of these publications are in biology and related medical and agricultural fields. Life sciences represent about 35% of Israel civilian research activities.

There are 160 industrial enterprises active in various biotechnology sectors.

There are 4,000 Israelis working in the biotechnology field today as compared to 400 in 1988.

75% of Israeli biotech companies are start-ups with fewer than 20 employees. A dozen of these companies represent 80% of the market value, employ 50% of the human resources, and generate two-thirds of the sales.

There are 36 companies in therapeutic pharmaceuticals in Israel and they generate 67% of the Israeli biotech product sales. Diagnostics account for 4% of biotech sales and agro-bio and veterinary products amount to 23% of sales.

Reprinted from the Israel High-Tech & Investment Report January 2008

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