Sequoia Capital has no plans to launch an Israeli growth fund, citing a dearth of later stage opportunities, Partner Randy Ditzler told PE Week.
The firm is making growth investments in Israel from Sequoia Capital Israel III, a $200 million fund that it raised in earlly 2005.
“There just haven’t been enough opportunities there to justify a separate growth fund,” Ditzler says.
Sequoia has pushed its growth strategy of investing large sums into mature companies that can quickly ramp up their profits into nearly every edge of its global investing empire. This year, it has announced an $861 million U.S. growth fund, a $400 million growth fund for India and a partner at the firm told PE Week the firm was raising a China growth fund this summer. But no other details on the China fund have yet been announced.
Sequoia has made five investments in Israeli companies or companies with clear connections to the country this year. It invested in mobile content company Amobee’s $5 million Series A in March with Accel; digital camera lens software startup Dblur’s $6 million Series A in April with Landa Ventures, Siemens and Tempo Capital Partners; Internet telephone company Jajah’s $3 million Series A; security software startup PortAuthority’s $18 million Series D, led by New Enterprise Associates; and networked storage company Sanrad’s $10 million Series B, which was led by Foundation Capital.
One key difference that may be keeping Sequoia’s investments in Israel small has to do with the country’s market for technology products. “China and India are different,” Ditzler says. “Entrepreneurs there are making products for their own markets. Israel has no natural market, so entrepreneurs there have to build products for the U.S., Europe or Asia.”