New Era Capital eyes $150M fund despite institutional investor reluctance over war
The fund has completed a first close of $80 million and plans to invest in 20 to 25 companies.
The Israeli venture capital fund New Era Capital Partners is raising its third fund, targeting $150 million. The fund completed a first close of $80 million, Calcalist has learned. This initial closing allows the fund to begin investing in new companies, which it has already started doing in recent months. Notably, the entire fundraising process took place during the ongoing war.
New Era’s third fund follows the same strategy as its previous funds, focusing on early-stage investments. Investors in this new fund include previous backers as well as foreign and Israeli institutional bodies. The first fund, launched in 2017, raised $60 million, and the second, in 2020, raised $140 million.
Founded seven years ago, New Era is managed from its offices in Tel Aviv and has additional offices in Boston and London. The fund is led by managing partners Gidi Argov and Ran Simha, and new partner Ziv Conen. To date, it has invested in over 30 companies, including Papaya Global, Optibus, Workiz, Assured Allies, GlossAi, Neosec, Aiola, and others. The fund plans to invest in 20 to 25 companies using the same approach it has applied to its earlier funds.
The partners bring diverse backgrounds to the fund. Gidi Argov spent three decades as CEO of international companies in the U.S. and was a senior partner at one of the world’s most successful investment funds. He is also a private investor in both the U.S. and Israel and founded the successful "Argov Program" at Reichman University. Ran Simha, a former technological and economic advisor to Israeli President Shimon Peres, worked in England at Lehman Brothers and was an investment manager at a hedge fund headed by Sir Ronald Cohen. Ziv Conen is a graduate of Unit 8200 and a former partner at McKinsey in Boston.
In a conversation with Calcalist, Ran Simha, one of the fund’s managing partners, said: “We invest in the early stages of companies’ lives when they have initial sales. As investors, we see great opportunities because company valuations have decreased. We are particularly interested in fintech investments and were the first investors in Papaya Global. AI must be specific and accurate, but Israel has the potential to lead in the applications sector.”
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Simha noted that the fund will primarily focus on enterprise software, with minimal investment in hardware. “We’ve felt the challenge of raising funds during wartime. The first closing was a positive surprise, as it was entirely made up of foreign investors who had previously invested with us. One of our largest investors is Hamilton Lane, which has supported us for many years. Another major investor group is based in Boston, and we have investors continuing with us from the first fund. However, when we approached institutional bodies and universities, it was difficult to secure commitments, and although no one explicitly cited Israel or the war as the reason, it was clear that this was the case. It is very important that local institutions support the Israeli funds.”
Simha expressed optimism that the Israel Innovation Authority’s plan to support institutional investors interested in Israeli funds will be beneficial. “This plan is more effective than investing directly in companies,” he said. He also introduced the fund's new partner, Ziv Conen, who brings significant experience from the Intelligence Corps and McKinsey. Conen's expertise enhances the fund's ability to analyze and identify breakthrough companies, particularly in the cyber and security sectors. “Being connected to the networks of military unit graduates is a huge advantage,” Simha added. “Many entrepreneurs have left the country, so we must maintain strong connections abroad.”
Gidi Argov, managing partner at the fund, emphasized the fund’s mission: “We are committed to working closely with entrepreneurs to help them build global companies. The transition to multi-arena operations is crucial. Success in this area allows for the creation of significant and stable businesses.”
Ziv Conen, the new partner at New Era, said, “Given the global situation, there is unprecedented demand for cyber solutions, and Israel is at the forefront of this field. Entrepreneurs from Israel’s tech units bring years of practical experience, which helps them build leading companies. New Era’s third fund will place a strong emphasis on cyber companies with breakthrough technologies.”
