Vertex Ventures strikes $150 million deal with StepStone for fourth fund holdings

Venture capital fund Vertex Ventures is selling a portion of its holdings in its fourth fund to StepStone Group for $150 million, Calcalist has learned. Jefferies Investment Banking was the exclusive advisor on the deal.

The sale will allow investors and partners in the Vertex early-stage fund to receive a handsome return on their investment without having to wait for startups to be acquired or go public. In its essence, this deal is no different than a secondary sale, with veteran investors selling their shares to new investors. This deal will allow Vertex to provide a 100% return for the early investors in the fund and reduce the level of risk they face, while still maintaining some holdings in the fund’s portfolio companies and a potential for another payday.

StepStone signed a similar deal, for a smaller sum of $80 million, with Israeli VC Qumra Capital two years ago. Among the companies included in Vertex’s fourth fund are several promising unicorns including OwnBackup, which raised $240 million at a $3.3 billion valuation, Verbit, which raised $250 million at a $2 billion valuation, Yotpo, which raised $230 million at a $1.4 billion valuation, and Axonius, which raised $100 million at a $1.2 billion valuation.

Vertex Ventures was founded in 1987 by Yoram Oron and was an early investor in Waze, CyberArk, and SolarEdge. Vertex focuses on early-stage investments and has over $1 billion in assets under management.

Selling a portion of a portfolio has become a relatively popular exit strategy for Israeli VCs, who specialize in early-stage investments and aren’t always interested in waiting until a startup is acquired or goes public until they see a return on their investment. StepStone has $121 billion in assets under management.