PipelBiz CEO and co-founder Or Bennun .
(photo credit: NIR SLAKMAN)
Prior to recent legislative changes, investing in and enjoying the financial fruits of Israel’s start-up success was primarily limited to a modest network of venture capitalists and business angels.
While equity-based crowdfunding started to make waves in Israel as early as 2013, primarily through leading platforms OurCrowd and iAngels Crowd, investments were still limited to accredited investors, requiring assets exceeding NIS 8 million.
In January 2018, however, the Knesset relaxed regulations on crowdfunding, enabling all start-ups to raise money from an unlimited number of members of the public – including non-accredited investors – through supervised online platforms, and without publishing a prospectus.
Within one month of the reform, Tel Aviv-based PipelBiz became the first platform to receive a license from the Israel Securities Authority (ISA) to take advantage of the new regulations and offer equity-based crowdfunding opportunities to all Israeli citizens.
To date, more than 3,600 people have invested in excess of NIS 40m. ($11.2m.) in 32 investment opportunities, ranging from medical device development to magnetic field technology and cannabis-infused snacks.
“We want to enable new players to be part of the start-up nation game, and be part of the next exit,” PipelBiz CEO and co-founder Or Bennun told The Jerusalem Post.
“We are the first company in Israel to receive an ISA license. Anyone can invest, starting from just NIS 500, and enter the start-up ecosystem.”
Equity crowdfunding is expected to grow significantly in the coming years, with total annual transactions worldwide expected to reach $6.9b. in 2019, and almost $12b. in 2023, according to research company Statista.
Current campaigns led by PipelBiz include raising finance for sleep apnea treatment device-maker Thomas Medical; IP communications systems developer Video Access; service provider application Spetz; and co-working space management platform Pickspace+.
“Because we strongly believe in every company that we put forward, PipelBiz also invests in every company, on the same terms as the crowd investors,” Bennun said.
“We usually invest in seed-stage or seed-plus-stage companies after already receiving some level of investment. We aim to offer as much variety as possible to investors, and we invest primarily in people. The entrepreneurs have a lot of responsibility to solve problems and progress.”
Not satisfied with just raising money for other companies, PipelBiz is now seeking investors itself as it aims to diversify into additional sectors, including property investments.
With the company acquiring equity in every successful crowdfunding investment, Bennun emphasized that investors in PipelBiz will also be investing in the platform’s entire portfolio.