How to invest in leading Israeli startups

Meet the leading digital platform for investment in Israel hi-tech

 
 ExitValley Founders (photo credit: EXITVALLEY )
ExitValley Founders
(photo credit: EXITVALLEY )

'For entrepreneurs, it’s hardest at the beginning – they spend most of their time creating new technology out of scratch, they need to hire the right mix of employees, and most important, they need to raise enough operating funds to give them breathing room,” says Shahar Shraga, co-founder and CEO of ExitValley, Israel’s first venture capital platform. 

ExitValley’s platform was founded in 2015 to provide start-ups with an effective opportunity to raise capital, while enabling the general public to invest in Israeli companies and become shareholder partners in the Start-Up Nation.

The company was founded by the architects of the internet investment industry in Israel and leads the market with the highest number of completed rounds and the highest amount of funds raised.

“After the company was founded, we carried out the first fundraising round ever held on an internet platform in Israel, and we reached $400,000 in less than 24 hours,” Shraga recalls. “At that moment, we realized that we had the power to revolutionize the capital raising market in Israel.

"Today, entrepreneurs from all industries and sectors approach us, and we are proud that we have become an integral part of the Israeli innovation ecosystem.”

Shahar Shraga, co-founder and CEO of ExitValley

Shraga and his partner Nir Meital, co-founder and CMO for the company, are behind the establishment of the platform. Shahar holds a BA from the University of Haifa and an MBA from Ben-Gurion University of the Negev. Nir holds a BA in Economics and Political Science from Tel Aviv University and an MA in Security Studies from Bar Ilan University. The two served together as officers in an elite military unit and continued together to the reserves as company commanders in the same unit.

THE EXITVALLEY team (Credit: ExitValley)THE EXITVALLEY team (Credit: ExitValley)

Yoel Ettedgi, co-founder and company CTO, is in charge of development of the company’s technological infrastructure. Ettedgi, who has more than 20 years of high-tech experience as a consultant, investor and project manager, conceived and created ExitValley’s technology platform, along with its ground-breaking stock exchange tools. 

“Since the company’s founding, we have raised more than $60 million for over 100 companies,” says Shraga, “including start-ups in a variety of sectors such as cleantech, medical devices, digital health, edtech, fintech, agritech, foodtech, and many more. 

“The beginning was very challenging, and there were numerous obstacles,” he continues. “At the time, the ecosystem was still operating along more traditional capital-raising lines, and start-ups in their early stages suffered from the most significant lack of available funds. Since our model was very innovative in Israel, we had to educate almost all sectors of the industry, including the regulator, lawyers, entrepreneurs and investors. 

“We started this process and today it is thriving. There are dozens of entrepreneurs who have succeeded with us."

"Some sold their companies, and others grew with them and even went public. We are proud to know that we have contributed significantly to the growth of our portfolio companies.  They recruit employees, develop their businesses and grow the economy. It is with deep satisfaction that we can say today that our name is listed in the notebooks of almost every entrepreneur at the beginning of their career. We have a great deal of knowledge and added value that we can bring to any company that chooses to work with us.”

Trailblazers

The companies that are shown on ExitValley’s digital platform come from a variety of different fields, but what they have in common is that they are groundbreaking and promising in their areas. Among the start-ups featured on the site these days are Clariter, which brings an innovative solution to the global plastics problem by turning the material into an industrial raw commodity, and the medical start-up BioXtreme, which has developed technology for the rehabilitation of stroke victims. There are also start-ups from the world of leisure and recreation, such as CreamCol, which has developed a patented technology that allows any alcoholic beverage to be turned into an edible alcoholic cream. All start-ups shown on ExitValley’s website also benefit from the platform’s exclusive technology. 

“Our technology platform enables the complete establishment of funding rounds, in all aspects (content, business, and legal), which allows us to best manage the rounds, together with the entrepreneur,” explains Shraga. “But beyond the system and the additional tools we are developing, the knowledge and experience of our team is the significant advantage. After over 100 successful rounds, it is safe to say that we know what our investors are looking for.”

ExitValley was a pioneer in the field and was a noteworthy contributor to the regulatory change that enabled the establishment of its internet platform. The company quickly perceived two significant realities: that there is a substantial shortage of capital for Israeli companies in their early stages, and that investment in the Israeli high-tech industry is something that is accessible exclusively to a very small group, consisting mainly of venture capital funds and incubators. 

SHAHAR SHRAGA, co-founder and CEO of ExitValley (Credit: ExitValley)SHAHAR SHRAGA, co-founder and CEO of ExitValley (Credit: ExitValley)

“We have some advantages over other entities that claim to do what we do,” Shraga says. “We are the largest platform in Israel with the most experience, and we have raised the largest amount of money for the most companies. The method we have built is a technological system on which fundraising is based, and it gives us a significant force multiplier. We know how to utilize audiences and communities for our capital-raising rounds. 

Beyond that, we are a creative company that knows how to operate in a very complex and competitive environment. In the beginning, the regulatory environment in Israel was less developed than those of Western countries such as the USA or England, and it was not easy to pave the way for everyone. Today, the road is smoother, but we guard against any complacency. ExitValley is always working on creating new investment channels in the world of venture capital, along with the development of a variety of technological systems which aim to simplify the entire process, both for the investor and the entrepreneur.”

“Another advantage that we have is human capital,” he adds. “We have one of the most experienced teams in Israel, we have worked with hundreds of entrepreneurs, and we have developed very precise methodologies which can identify the DNA for success. Unlike other platforms, we adhere to high standards. Not every company will reach the capital-raising stage. We have a set of many tests that we perform with each of the companies, and only the appropriate ones reach our platform. These are usually companies at a more advanced stage, ones that have already raised money from significant entities such as incubators, funds or prominent investors; this allows us to choose the most suitable companies that we believe will succeed down the road.” 

An Opportunity to Grow in Israel

The companies that appear on ExitValley’s platform are Israeli or Israel oriented, such as companies that have been sold or are partially owned by investors from foreign countries.

“We appeal to investors from all over the world,” says Shraga. “Thirty percent of our investors come from Europe, the US, Australia and New Zealand, and of course, the rest come from Israel.

“There is a sense that great opportunities for growth exist in Israel, despite the instability and everything else happening today in the capital market. Israeli start-ups are a significant growth engine in Israel and around the world,” says Shraga. “Several factors contribute to this situation – the number of companies established here every year, the human capital raised in Israel, the investment in research and development, the openness to innovation, and excellent curriculum and training programs. There is an entire industry here that generates innovation. 

“On the other hand, there are challenges and there are quite a few problems in the industry,” he adds. “In the last decade, the number of new start-ups has dropped nearly 60 percent. Entrepreneurs are not as quick today to leave a stable workplace and embark on an independent path. They realize that no one can accurately predict where the roller coaster will stop. 

“At the same time, today’s start-ups are of higher quality. We still hear about a huge amount of capital being raised by foreign funds investing in Israel, but most of the money goes to companies in advanced stages. Seed funding is less saturated, and the entrepreneur who decides to leave his regular job will have difficulty obtaining funds. We, as mentioned, are active in these stages as well, and allow the good companies to fulfill successful recruitment rounds.

“Our best business card is the dozens of successful companies in our portfolio, and the evidence that a great deal can be accomplished in this space. Many investors from Europe, the US and even the UAE are constantly seeking out Israeli companies, something we see in our funding rounds. From my point of view, great things are being accomplished here, and so a lot of people from all over the world just want to be part of the Start-up Nation. We at ExitValley make that possible.”

This article was written in cooperation with ExitValley.

To learn more visit: www.exitvalley.com

Translated by Alan Rosenbaum.