Israel’s Most Active Venture Investor OurCrowd Reaches $2 Billion Investment Commitments
Global venture investing platform OurCrowd announced today it has passed $2 billion in investment commitments. OurCrowd will host its 10th anniversary celebration at the OurCrowd Global Investor Summit on February 15, 2023, in Jerusalem, Israel, preparing for another decade of active global investing from its base in Startup Nation.
Given current economic conditions and decline in venture investing, OurCrowd founder and CEO Jon Medved was asked recently by CNN’s Richard Quest whether Startup Nation still has its cutting edge. Without missing a beat Medved answered “In fact, it’s getting sharper by the day.”
Indeed, the Israeli “tech juggernaut” as Medved calls it, has kept the Israeli economy in relatively good health. Israel’s GDP growth rate in 2022 is expected to be 5.2%, unlike any other developed economy, where the average growth is forecasted to reach only 2.4%, with the U.S. at 1.6%. The Israeli Shekel is the only major currency, out of 31 actively traded, to appreciate against the U.S. dollar over the past 10 years.
Inflation in Israel was 4.6% in September, compared to 8.2% in the U.S. and 9.9% in Europe. In Q3 of 2022, the unemployment rate in Israel was 3.5%. But layoffs have started to affect the tech sector which has enjoyed unprecedented growth in the last two years. And in concert with global trends, VC funding is down—the amount raised in the second quarter of 2022 was the lowest amount raised by Israeli startups since the second quarter of 2020.
This may be only a short-term dip as the worldwide economic turbulence could actually drive long-term trends that favor increased investment in private markets and startups.
Currently, only about 1% to 2% of the estimated $80 trillion held by individual investors worldwide is allocated to alternative investments, according to PitchBook Data Inc. But this is changing, as individual investors look to new approaches for dealing with public markets volatility and the simultaneous decline in the value of both stocks and bonds.
Ten years ago, Jon Medved launched OurCrowd to give individual accredited investors opportunities to invest small amounts (as little as $10,000) in the startup economy, in companies across all sectors and stages OurCrowd vets and selects for them. Here’s Medved’s take on what the increasing interest in alternative assets means to equity investment platforms such as OurCrowd:
“While we all are dealing with public valuations that have come down dramatically in the public markets in recent weeks and months, there is a great amount of hope and optimism about this rebalancing of investment assets into the private markets, especially on the part of individual investors. The real question is going to be how the platforms are going to handle the demand and can they deliver to the individual investor the same kind of outsize results that traditional funds have delivered.
As the minimums online come down to thousands of dollars rather than requiring minimums in the millions of dollars, correctly invested this can indeed deliver potential huge returns to individual investors. Will this work out this way? Time will tell and for sure it will be very exciting to watch and to participate!”
OurCrowd’s participation in the startup economy over the last ten years has led to 60 exits from 370 portfolio companies and an additional 410 companies held via partner funds. Today, the OurCrowd platform has almost 220,000 registered investors from 195 countries.
So far in 2022, more than $250 million has been raised through OurCrowd and over 116 investment rounds in startups and funds closed. The largest target for investment this year was healthcare (22%), followed by Enterprise Software (18%), then Agriculture and FoodTech with 13% each. 47% of OurCrowd’s investments came from the U.S., 17% from the EU and 11% from Asia.
“Our investors play a vital role in providing the funds that enable smart entrepreneurs to address some of the world’s most urgent problems. As we celebrate our 10th anniversary, our focus is firmly on the future and bringing the latest technology to bear on the challenges we face in sustainability, healthcare, food security, alternative energy, alternative proteins and cybersecurity,” said Medved.
Over 23,000 people from 183 countries registered to attend the previous OurCrowd Summit in 2020, where OurCrowd enabled over 1,400 connections between multinational corporations, startup companies, and investors. Early registrations for the 2023 Summit are running at twice the rate of previous years.
OurCrowd expects hundreds of visitors from the Gulf and North Africa, representing the largest ever delegation to Israel of investors, corporate executives, government representatives, and journalists from the broader Middle East, reflecting OurCrowd’s leadership in regional cooperation.
“As Israel’s most active venture investor, with corporate partners around the world and strong connections to the Gulf, OurCrowd is uniquely positioned to bring the global startup ecosystem together in Jerusalem. I’m proud that the Summit provides a gathering place to set the themes and tech trends for the coming year and to get business done,” said Medved.