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Walden Israel Ventures III falls short

Walden Israel has secured $90 million to invest in high-tech Israeli early stage companies. Braving tough fund raising conditions the fund fell short of its original $120 million target, despite attracting increased commitments from existing investors and new limited partners.

Roni Hefetz, founder and general partner of Walden Israel, said: “We are very pleased with the completion of this funding, which took place in its entirety during a very difficult period – a time of crisis in the global high-tech sector, institutional private equity markets, and geopolitical situation in Israel.” According to Walden general partner, Eyal Kaplan, the September announcement of tax waivers for foreign investors in Israeli VC funds helped push the fund to its completion. The fund’s investors include Allianz, Goldman Sachs, HarbourVest, NTT Data, TIAA-CREF and Verizon Asset Management. Native investors, Bank Hapoalim, Bank Leumi, Bank Mizrachi and the Gemulot Pension Funds, have also participated in Walden Israel Ventures III.

The fund, which began raising at the end of 2000, will be invested in approximately 15 communications and IT companies. Hefetz believes the next few years will offer attractive valuations and that Israeli technology companies will generate substantial long-term values. In May this year the new fund made its first investment in ColorChip, a start-up developing components for optical Wavelength Division Multiplexing (WDM) networks. The total investment of $6.5 million was made with Israeli-based Eurofund 2000 and German VC, Polytechnos Venture-Partners.

Walden Israel is part of the Walden Group and includes WaldenVC, which is focused on technology opportunities in the US and Walden International Investment Group, which invests in the Asia Pacific region as well as the US. Walden was established in Israel in 1994, when it raised $33 million for its first fund. It went on to raise a $60 million second fund in 1998 and has invested in sectors such as enterprise software, e-commerce technologies, healthcare, communications and Internet infrastructure. In June 2001, the company expanded its team with the addition of two investment professionals, Noga Kap and Hillik Nissani, and to assist its portfolio companies, an executive placement expert and a marketing communications director.