Amid the Gaza war and ongoing economic uncertainty, venture capital firm NFX, founded by Israel-based investor Gigi Levy-Weiss, raised $325 million in fresh capital to back young tech startups in Israel and California’s Silicon Valley.
Speaking to The Times of Israel, Levy-Weiss said that NFX’s fourth fund will invest in 50 to 60 young, fast-growing startups of which about 40 percent will be deployed in Israel and the remainder predominantly in the US. The fresh capital will be earmarked for early-stage startups building cybersecurity systems, software development tools, AI applications and AI-focused consumer products.
“We believe Israeli founders have the speed, resilience and vision to lead the AI era, and we are here to back them,” Levy-Weiss said.
The Israeli-American VC firm raised fresh capital for its fourth fund from US-based investment funds and a new investor from a Middle Eastern capital, among others, Levy-Weiss said.
The announcement of the closure of NFX’s fourth fund comes a week after a US-brokered ceasefire deal between Israel and the Hamas terror group was ratified to end the two-year fighting in Gaza. Israel has been facing growing criticism over its conduct during the Gaza war, which has been threatening to affect business relations with the country’s biggest trading partners.
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“We did get a lot of questions from investors about Israeli founders and entrepreneurs being able to continue working and focusing on their businesses during the war, and whether there is going to be any negative impact on companies or customers not wanting to buy from an Israeli company,” said Levy-Weiss. “We were able to tackle and explain that Israeli tech always delivers, and that, if anything, we are seeing our founders more focused and more determined than ever to continue running their businesses and see them even perform better.”
Illustrative: High-tech development centers in Herzliya, October 30, 2020. (Gili Yaari/Flash90)
During the two-year war with Hamas, thousands of tech workers and startup founders were called up for reserve military duty for prolonged periods. The resulting absence of personnel in the tech sector, the growth engine of the Israeli economy, impacted startups’ day-to-day operations, especially of smaller firms, as well as their ability to attract foreign investors and raise funding.
Despite these challenges, NFX has continued over the past two years of war to invest in dozens of new Israeli startups, the firm said.
“We are seeing the best of the best in Israel and Silicon Valley, and we are super bullish about the Israeli ecosystem,” said Levy-Weiss. “We think that Israel is a good place to deploy capital, which is why, despite us being able to invest, if we want, only in Silicon Valley, we continue to invest in Israel and are doubling down on the ecosystem.”
“We think that right now, as there is some shortage of capital, and not all funds are visiting the country, the opportunity to invest in Israel is larger than elsewhere,” Levy-Weiss added.
Founded in 2015 and based in San Francisco and Herzliya, the VC firm is led in Israel by Levy-Weiss, Sarai Bronfeld and Omri Amirav-Drory. NFX manages about $1.5 billion in total assets and has invested in about 200 startups across both ecosystems in Israel and Silicon Valley.
Over the past decade, the VC firm has built and sold 10 companies worth more than $10 billion combined, and invested in over 25 tech unicorns. Notable companies backed by NFX include Lyft, DoorDash, Patreon, Poshmark, Mammoth Biosciences, SimilarWeb, MyHeritage, Playtika, Plarium and Moon Active.
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