After 36 years of investing exclusively on U.S. soil, Greylock last week announced plans to begin backing early-stage companies in Europe and Israel.
While the formal proclaimation was oddly juxtaposed against the recent terrorist attacks, the timing was purely coincidental, said Moshe Mor, a venture partner with Greylock.
In fact, the firm’s plans to expand its investment horizons have been in the works for several months. Mor, who will lead Greylock’s overseas investment activities, originally came on board last December as a CEO-in-residence, and was recently promoted to his current post. Previously, he headed up SPL WorldGroup Inc., a U.S.-based software company with operations in Israel and Europe.
As Greylock seeks new opportunities on foreign soil, one thing that will not change is its investment strategy. Domestically, the firm has focused on early-stage enterprise software and communications companies, and will continue to do so overseas.
Specifically, it plans to back technology plays, chiefly in the storage, security and data communications arenas.
“Between the [software and communications] areas, we’re covering what most of the enterprises out there are buying in terms of technology,” Mor said. “At the end of the day, we feel technology is the primary driver for enterprises to maintain a competitive advantage, and those areas provide [the best] opportunities for our investors.”
Despite Israel’s domestic unrest, Greylock believes that the country’s quantity and quality of early-stage deals will continue to grow as its entrepreneurial community matures.
No Border Contraints
The firm is also looking at opportunities in the United Kingdom and the Scandinavian region. Spurred by an ongoing internal power struggle between Scandinavian governments and business owners over the privatization of telecommunications companies, some savvy executives are leaving large, government-run corporations to start their own wireless start-ups. Hence, there is no shortage of deal flow in that part of the world, Mor said.
The capital for the firm’s international investment activities will come from the recently-raised $1 billion Greylock XI, although no specific allocation for overseas investment purposes has yet been set.
To date, the firm’s international portfolio includes just two companies. In July, Greylock teamed with Fidelity Ventures to co-lead an $18.5 million Series B financing for Cash-U Mobile Technologies Ltd., a Netanya, Israel-based developer of a technology platform for mobile entertainment devices. Existing Cash-U investor Pitango Venture Capital (formerly Polaris Venture Capital of Israel) also participated.
The firm also brought Dublin, Ireland-based Cape Clear Software into the fold, investing alongside lead backer Accel Partners of Europe and ACT Venture Capital. Cape Clear, which makes a platform and rapid development environment for Web services, landed $16 million as a result of the financing.
Mor will be officially based in Greylock’s office in San Mateo, Calif., but he will spend equal time in the firm’s Boston location when not visiting companies in Europe and Israel. The firm currently has no plans to open an overseas office, which means Mor will be wracking up a lot of frequent flyer miles. He said he isn’t concerned about the extensive traveling he’ll have to do, though, even in light of the recent hijackings and resulting tragedies here in the U.S.
“I’ve been clocking 200,000 miles a year in the last eight years in terms of international travel,” he said. “It’s no use worrying about that stuff when you get on a plane. Life’s gotta go on.”
A Roundabout Network
Interestingly, Greylock did not recruit Mor from one of its portfolio companies. His connection with the firm actually comes from previous business relationships with some of the partners, most of who are from operating backgrounds similar to his.
Still, he didn’t sign on as a full-fledged venture partner from the start because he wasn’t certain he was ready to become a full-time venture capitalist, he said. He added, however, that he has no regrets.
“It’s a bit like moving from a quarterback role into a coach role,” Mor explained. “[Being a venture capitalist] allows me to work as a coach and spend a lot of time with companies sharing my experience.”
Robyn Kurdek can be contacted at: Robyn.Kurdek@tfn.com