VCs collaborate to launch fund aiming to maintain Israeli tech leadership

Israeli venture capital fund Sarona Ventures, in collaboration with Israeli and American venture capitalists, has announced the launch of a fundraising operation called TechShield. This initiative is designed to provide financial support to Israeli companies affected by the ongoing conflict, allowing them to continue their role in Israel's technology and innovation sector.

TechShield's mission is to extend the financial runway of affected companies, ensuring they have sufficient operating capital until at least March 2025. The initiative aims to provide capital to a range of Israeli companies affected by the ongoing conflict.

To be eligible for support under TechShield, companies must meet specific criteria. They should have been directly impacted by the war, with founders, managers, or staff called to reserve duty, experiencing slower business operations due to workforce shortages, or facing other immediate constraints. Additionally, these companies should have previously raised at least Seed or Series-A rounds and maintain service to a minimum of three active customers. Eligible companies can expedite their applications for investment through the TechShield operation.

Israel tech sector's strong response to regional conflict

Israel's tech sector has demonstrated resilience in the face of adversity in the past. After the Second Lebanon War in 2006, venture capital financing in Israel increased significantly, with investments reaching $1.76 billion by 2007. Following Operation Protective Edge in 2014, Israeli startups not only recovered but thrived, raising a record-breaking $4.43 billion by 2015. This history of overcoming challenges and prospering demonstrates Israel's commitment to innovation and excellence.

TechShield will consist of a series of reverse-fund syndicates, each comprising 5-10 pre-selected eligible companies. Partnering venture capitalists will allocate initial capital to each TechShield Syndicate, making it available to vetted investors. Investors will have the opportunity to invest in the syndicated companies, supporting the cause of protecting the Israeli economy.

Toot Shani, managing partner at Sarona Ventures, emphasized Israel's role in the global technology and innovation landscape, stating, “Israel has one of the most advanced technology and innovation hubs in the entire world, it is the most important driver of the Israeli economy comprising almost 30% of the country’s GDP. As investors, we recognize pivotal moments. As history has already proven many times, the Israeli market is immune and has the ability to recover extremely quickly, therefore, this is the right time to enter the market.”

All investments will be conducted through the secure platform of Fundit, a well-regarded division of the Headstart Group, Israel's alternative financing platform. “This is more than just a collaboration,” said Fundit CEO Rinat Berman. “It’s about safeguarding the future of the Israeli economy.”