Australians are flocking to Israeli equity crowdsourcing funding platform, OurCrowd, with local investors now accounting for about $60 million of the $260m that has been raised by the company for investment in hi-tech start-ups across the world.
Original article published in The Australian;
An Australian delegation of 25 local investors attended OurCrowd’s recent Global Annual Summit in Jerusalem, which featured 100 companies, 2000 investors, 100 corporate & venture funds and global companies such as Honda, GE, Intel and 3M.
It featured OurCrowd’s first ever Crowdbuilding Hackathon where 460 connections were made for 25 start-ups.
The Australian delegation included Geoff Levy, chairman of Monash Private Capital and former CEO and executive chairman of Investec Bank (Australia), and Ashley Krongold, CEO of the Krongold Group of Companies.
The Krongold Group has domestic and global interests in property development and investment and operates Australia’s largest independent Corporate Travel Management company, Voyager Travel Corporation.
Last week Swisse vitamins company chief executive and BRW rich-lister Radek Sali’s new $250m family office run by former Goldman Sachs banker Adam Gregory revealed that OurCrowd was one of its first two investments. The other was in private colleges owner Republica Education.
“We (Australia) are punching above our weight given our size with OurCrowd. So the Australian story is a really powerful one.
“We are raising significant pools of money for Australians to invest in these Israeli, US and other global start-ups,’’ said OurCrowd’s Australian managing director, Dan Bennett. OurCrowd, which opened an Australian office in 2014, allows investors to build a start-up portfolio with low minimum investments, using the “crowd” to pool resources to fund a project. The company has also invested directly in two Australian firms: Global Kinetics Corporation and Tapit.
While the two Australian companies were not present at the summit, a number from OurCrowd’s global portfolio were seen by the Australian delegates.
“The Australian delegates at the summit were impressed by the sophistication of Israel as a market and the sophistication of the OurCrowd team to tap into that global platform,’’ Mr Bennett said.
As part of its innovation package the federal government in early December tabled a bill in parliament providing for the addition of new fundraising provisions to the Corporations Act to improve regulation of crowdsourced funding.
They allow both start-ups and established small businesses to tap retail investors for equity financing via online platforms.
They also bring Australia into line with jurisdictions including Canada, the US, Britain and New Zealand, which allow retail investors to use digital platforms to provide equity to small business.
While Mr Bennett said the entire innovation statement was “extremely exciting’’, he said OurCrowd was “waiting where the government lands’’ on the legislation before deciding if the firm would commence crowdsourced funding from retail investors.
It currently only works with sophisticated or institutional investors. Israeli hi-tech companies raised a record US$4.43 billion last year, 30 per cent more than 2014, according to the IVC Research Center. The average size of a venture capital-backed financing round rose to $US8m ($11m) from $US5.9m in 2014.
Alex Waislitz’s Thorney Investment Group late last year revealed plans to invest up to $15m in a strategic alliance with Israeli early-stage technology investment platform iAngels, which is backed by a host of international high net worth players, including Russian billionaire Roman Abramovich.
iAngels is an investment platform that sources investment opportunities focused on elite Israeli start-ups and early-stage companies.
Twenty per cent of the $20m iAngels has raised since its launch 18 months ago has been from high-net-worth Australians.
Mr Thorney was an early investor in iAngels and has subsequently made several angel investments on the iAngels platform.
Attendees at the OurCrowd summit included its founder and CEO Jonathan Medved; Alan Boehme, chief technology officer, chief innovation officer, chief architect, and customer/commercial CIO for the Coca-Cola Company; and Harel Kodesh, vice-president and chief technology officer for GE-Digital.
Japanese car giant Honda also flew a group of executives and engineers from Japan and North America to Jerusalem to attend the conference.
Nick Sugimoto, senior program director of the Honda Silicon Valley Lab, told the audience that the car manufacturer, which sells 10,000 cars a year in Israel and 5 million cars a year worldwide, was looking for new opportunities for collaboration with Israeli firms.