Thursday, July 31, 2025

New Era Bets Big on Israel’s Startup Resilience - Alan Rosenbaum

 

by Alan Rosenbaum

Despite geopolitical challenges, the VC firm raises $120M for a third fund focused on early-stage Israeli tech ventures

 

Left to right: Gideon Argov, Shira Gershon, Eugenio Sabbadini, Ayelet Frish, Ran Simha, Danny Mann, Ziv Conen.
Left to right: Gideon Argov, Shira Gershon, Eugenio Sabbadini, Ayelet Frish, Ran Simha, Danny Mann, Ziv Conen.
(photo credit: SIVAN FARAG)

 

How has the Swords of Iron War affected investment in Israeli startups? What is the state of the Israeli startup economy today, and what is the outlook for Israel’s next generation of tech entrepreneurs?

If anyone is qualified to weigh in on these issues, it is the leaders of New Era Capital Partners, one of Israel’s leading venture capital firms, which has extensive experience and background investing in Israeli startups. Managing partners and founders Gideon Argov and Ran Simha, together with partner Ziv Conen and vice-president of business development and co-founder Ayelet Frish, recently sat down with the Jerusalem Post to discuss the launch of its Fund III that raised $120 million, the types of startups in which the firm invests, what distinguishes New Era from other venture capital firms, and the future of the Israeli tech economy.

Ran Simha explains the initial hesitation in launching the fund soon after the outbreak of the war in October 2023. “Everyone was in complete shock, and investors completely stopped investing in Israel. We were pleasantly surprised that the vast majority of our foreign investors wanted to continue. In December 2023, we had our first close with 100% foreign limited partnerships, which was a great testament to their strong belief in the Israeli tech ecosystem.” Among the LPs backing New Era is Hamilton Lane, one of the world’s largest private market asset allocators, known for its consistent, large-scale investments in Israeli innovation.

In the past year, many more investors returned, new investors joined, Israeli startups have continued to grow, and new startups have been founded regularly. Ayelet Frish, whose branding expertise has been a crucial part of New Era’s success, adds, “The fact that New Era’s Fund III raised $120 million during the war is a testament both to the tremendous confidence investors have in the team and in the excellent performance of Funds I and II – as well as in the Israeli economy and the country’s young people, who consistently innovate and create some of the world’s leading unicorn companies across a wide range of sectors.”

Gideon Argov says that the Swords of Iron War has showcased Israel’s resilience and ingenuity, a quality reflected in the tech sector. “The ability of the country to rapidly recover its footing, and over a year and nine months, incapacitate its enemies in ways that were unthinkable before the war is mirrored in the private sector and the tech sector, particularly by the incredible resilience of entrepreneurs and companies, although in the first few months of the war, in some cases, 20% of employees at some of the companies that we invested in were in reserve duty for extended periods.

“Israeli resilience, innovation, and grit helped save the day. We think that is one of the factors that was in play here, as people thought about our own group and the kinds of companies that we invest in. Frankly, those are the very same characteristics that we look for in our companies – resilience, innovation, and grit.”

New Era’s Funds I and II have already proven to be great successes. Ziv Conen, who led technological, intelligence, and operational teams in the IDF’s elite Unit 8200 and was an associate partner at McKinsey & Company, points out that three of the ten companies in New Era’s Fund I became unicorns, and the fund has performed at a top decile level.   New Era’s Fund II, he said, is an early vintage fund, whose performance is in the top quartile.

What technologies is New Era investing in? Conen says that the firm has a preference for enterprise software with an AI flavor across different verticals, such as cybersecurity, fintech, HR tech, and smart mobility. “We love taking workflows in industries that are heavily manual, that are outdated, and bringing them with AI into the 21st century,” he says. As an example, he cites Optibus, a company from Fund I, which provides a platform for public transportation management. Before Optibus, many public transportation companies managed their fleet and operations with pen and paper. Optibus has an AI-powered platform to optimize their operations. A second company, Wisor, does the same for freight forwarding. 

What is the state of Israel’s economy? “In every financial crisis over the past few decades and every security and geopolitical crisis that Israel has gone through,” says Argov, “the economy has bounced back very quickly. The indications are that Israel’s GDP is slated to grow at a rate of over 3% next year. I don’t think there’s a precedent for a wartime economy that has bounced back as quickly as Israel. Israel’s economic performance has been extraordinary.”

Simha says that deal flow and deal sourcing are critical to the success of VC funds. “You want to be a phone call away from the next entrepreneur who is thinking about founding his next venture.” With that said, he notes that New Era has several unique advantages. It has managing partners located in Israel and the US, which is a great advantage for startups. “The fact that both Gideon and Ziv, with their vast background and experience, are based on the East Coast, where the majority of startups move today, is a huge value for entrepreneurs. They assist them in moving, in establishing themselves on the East Coast, finding employees, finding customers, and thinking about strategy.” 

In addition, the New Era leadership team blends a unique mix of skills and backgrounds.  Argov has had extensive experience leading large companies in the US, both in the tech space and in private equity, while Conen has a broad consulting background in the US, together with his sophisticated technical knowledge from his service in the IDF’s Unit 8200. Simha served as economic and technology advisor to Shimon Peres during his presidency, and Ayelet Frish is an internationally-renowned strategic advisor and an expert in business development and branding. Together, the four provide a wealth of expertise in finance, technology, experience, and branding.

Argov believes that the future of high-tech in Israel has been forged by the experiences of the past two years. “The reason that Israel was able to bounce back as quickly and effectively as it did was due to the generation of Israelis in their 20s and 30s who rushed to defend the country. Collectively, they were an iron wall that defended the country and allowed it to recover. That generation is, in many ways, the generation that we are investing in the fund, and it’s the generation that will rebuild the country. It has the capacity and the tenacity to do so. It has the ability to reimagine the country, it is reimagining industries, and we are investing in the fruits of their reimagination.”

This article was written in cooperation with New Era Capital Partners 


Alan Rosenbaum

Source: https://www.jpost.com/business-and-innovation/banking-and-finance/article-862860

Follow Middle East and Terrorism on Twitter

No comments:

Post a Comment