Israeli-UK venture capital firm 83North has closed its seventh $400 million fund for investing in early-stage and growth startups. Due to the global economic uncertainty and unlike previous funds, 83North decided to merge its early stage startup and growth company investments into the same fund.
Last year, 83North closed two funds totaling $550 million, and the venture capital firm now has $2.2 billion under management.
Despite the difficulty of attracting investors to new venture capital funds these days, due to the rise in interest rates which make investment in risk-based instruments less viable and due to the geopolitical uncertainty, the fund managed to raise capital from the limited investors who have invested in the past.
A number of exits
Estimates are that a series of exits over the past 18 months have given the fund some of the highest returns in the venture capital industry. Due to inflation fears last year, the fund preferred to sell its shares in companies with IPOs, including ironSource, Payoneer and Marqeta. Although the fund was not a partner, for example, in the giant merger of ironSource, valued at 11 billion dollars last year, it saved itself from the big decline in the values of public companies in the last 18 months.
The fund also benefited from mergers and acquisitions between private companies and tech giants. 83North was a prominent partner in the sale of delivery app Wolt to US rival DoorDash for $8.2 billion and the sale of Israeli cybersecurity firm Siemplify to Google for $500 million in January, and was the sole outside investor in Gigi Levy’s Israeli mobile gaming company Beach Bum of Gigi Levy, which was sold at the end of last year for 275 million dollars to the French company Voodoo.
However, not everything has been rosy at the fund: the data storage and backup company Zerto, which was previously considered one of the most promising startups in its portfolio, was sold to HP for $374 million – not a large amount compared to the invested capital. in it, about 180 million dollars.
Most of 83North’s partners are Israeli, but the investment policy is global
As far as is known, the limited investors in the fund have not changed. The foundation refuses to reveal their identities, but earlier the name of Princeton University’s endowment fund was announced as a prominent investor. According to research firm PitchBook, other limited investors are Blackrock, Germany’s SAP and Cross Creek.
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83North is a somewhat unusual fund in the Israeli venture capital landscape: most of its partners are Israeli, but its investment policy is global – the company invests in startups in Israel, Europe, the UK and the US. The fintech company Marqeta, for example, one of the fund’s largest portfolio companies involved in an IPO in the last year, is located in California and has no ties to Israel.
The foundation also has a limited partner structure: it has no more than four partners who do most of the work alone, without an advisory team: Israelis Arnon Dinur, Gil Goren and Yoram Snir, and British partner Laurel Bowden.
Published by Globes, Israel business news – en.globes.co.il – on October 2, 2022.
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