Venture Capital Firm Grove Raises $120 Million in Commitments for Second Fund

Israel-based venture capital firm Grove Ventures Capital (GP) Ltd. has raised $120 million in commitments for its second fund, the company announced Tuesday. Grove II will invest in early stage Israeli deep tech companies, the firm said. The firm’s intention to raise a second fund was first reported by Calcalist in July. Grove has already made two investments from its second fund that will be announced in the upcoming months, the company said.

"I am sure some funds do a better job than we do on fintech or cyber, so we chose to focus on deep tech, a field where it takes companies long to mature,” Dov Moran, managing partner at Grove, said in a Monday interview with Calcalist. “I told investors we do not have companies that will be ready for an exit in two or three years, but I had no trouble raising commitments,” he added.

“Israeli investors are very good in a lot of fields, such as enterprise software, where I cannot succeed because I do not have the connections nor the expertise,” Moran said. Each fund must find its strong suits, he added. Traditional funds do not do so well with chips, because it is an industry that requires a lot of technical know-how and connections, he said.

Moran believes the coronavirus could have as much impact on the economy as a world war. “I know one thing, if you invest in trends, you will not last,” he said.

The current fund brings Grove’s commitments to $230 million. Tel Aviv-based Grove invests in companies focused on chips, internet-of-things (IoT), artificial intelligence, and cloud infrastructure, with the intent of leading innovation in various sectors including industry 4.0, digital health, and smart transportation.

Among Grove’s portfolio companies are battery free sensor startup Wiliot Ltd.; open-source API marketplace RapidAPI, incorporated as R Software Inc.; infrared imaging startup TriEye Ltd.; and industrial equipment sensor startup 3D Signals Ltd. 

Before founding Grove in 2015, Moran was the CEO of M-Systems Inc., the company that invented the USB flash drive. M-systems was bought by SanDisk Corp. in 2006 for $1.6 billion. Additional partners in Grove are Sigalit Klimovsky, Lotan Levkowitz, and Omri Green.