If you ask Alan Feld what Chinese investors should know before investing in Israeli startups, his answer is simple: a trusted, local partner.
“Investing is very much a local business, ” he explains.
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Feld is the cofounder and managing partner of Vintage Investment Partners, Israel’s only active fund of funds. They manage about $1 billion dollars in funds and discretionary accounts across Israel, the U.S, and Europe. These include secondary funds, or holdings in other private equity and venture capital investments, co-investments in late-stage companies, and a fund of funds.
But Vintage Investment Partners isn’t just about leveraging money. One of the company’s most valuable assets is its massive database. Their proprietary database includes more than 4, 000 venture and private equity-backed companies in Israel, the U.S, and Europe, as well as more than 3, 000 investors.
“We see about twenty companies a week, ” says Feld. He and his team will drive around Israel, where companies are two hours away at most, and meet different entrepreneurs, companies, and investors. Feld also conducts similar meetings in Berlin, London, Stockholm, and other cities outside of Israel.
In doing so, Vintage Investment Partners not only does due diligence on its underlying companies, but also grows its enormous, cross-continental network. The investment firm can then use its database to connect investors, companies, and entrepreneurs to the right contacts for sourcing talent, business partnerships, and more. Offered as a free service, this strengthens and helps the firm expand its network even further.
For Chinese investors interested in Israeli startups, Vintage Investment Partners’ database could prove crucial. Israel is home to thousands of startups – the most startups per capita in the world – which can be challenging to navigate for any investor or firm without local or detailed knowledge about Israel’s startup ecosystem.
Not that that’s stopped Chinese investors. Famous Chinese investor Li Ka Shing and his Horizon Venture fund have invested in 29 Israeli startups and were early investors in Waze, a crowd-sourced navigation app that Google acquired for $1.15 billion in 2013. Alibaba, Baidu, Fosun, Renren, Tencent have also poured investments into Israel’s startup ecosystem, which boasted about $15 billion USD worth in exits last year and eighteen IPOs.
At the same time, Israeli startups are looking to scale into larger markets like China’s. MoovIt, an app that provides different services to public transportation commuters, such as trip planning, service alerts, and more, plans on launching in Hong Kong, Guangzhou, Shanghai, and Beijing. Last year, the social investing platform eToro secured an equity round from Ping An Ventures, a Chinese venture capital firm.
“I want Chinese investors to have a good experience in Israel, ” says Feld. “And Israel could be a bit of a bridge. It could be a conduit between China and the U.S, and China and Europe.”
According to Feld, some trends to look out for in Israel’s technology world include cybersecurity, cloud technology, and computer vision startups, such as JustVisual and Cortica.