YL Ventures, the premier seed stage venture capital firm headquartered in Silicon Valley while investing in Israel, today announced it has closed its third fund, YLV III. The new fund builds on the success of its two prior funds, both of which generated returns in the top quartile of all North American Venture Capital funds, according to Preqin.
.@YLVentures closes $75M fund for seed stage Israeli entrepreneurs #cybersecurity #drones #AI #autonomouscars
YLV III was significantly over-subscribed with nearly 100 percent of existing YLV II investors participating, and closed on $75 million, 25 percent above its target of $60 million. The fund will invest in seed stage Israeli companies in high-growth sectors including cybersecurity, enterprise software, autonomous vehicles, drone technologies and VR/AR. 1
YLV III aims to invest in two to three companies per year. Initial seed investments will be $2-3 million, with YL Ventures leading the rounds. A large portion of the fund is reserved to participate in U.S. VC-led follow-on rounds of its portfolio companies.
Heading the new fund is Silicon Valley-based Managing Partner Yoav Andrew Leitersdorf, a serial entrepreneur and early stage investor for 25 years who founded the firm in 2007. Rounding out the team is Ofer Schreiber, partner, leading the Israeli office; Iren Reznikov, senior analyst, and Sharon Seemann, marketing director. YL Ventures is currently recruiting additional investment professionals to join its Silicon Valley and Tel Aviv offices.
Leitersdorf attributes the heightened interest in YLV III to soaring cybersecurity spending, expected to exceed $202 billion in 2021, according to Markets&Markets, and the deep domain expertise and experience in cybersecurity that Israeli entrepreneurs possess, most of who graduated from the IDF’s intelligence units.
“For YL Ventures, this convergence represents an opportunity to address evolving security risks and leverage Israel’s unique talent pool to meet mounting global demand for the most effective solutions,” said Leitersdorf.
“Israel is a well-known powerhouse for cybersecurity and related technological innovation. We are able to harness that expertise to expand into new sectors that leverage artificial intelligence, machine learning, computer vision, big data and robotics, all of which are highly relevant to our new fund. While remaining extremely selective, we can vet ideas fast, devote substantial attention to helping our companies scale, and provide a lot of value post-investment.”
YL Ventures is also expanding its leadership team with the addition of a number of high-caliber and experienced venture advisors. Justin Somaini, chief security officer at SAP, is the first of these. A prominent security industry angel investor, board member and advisor to many security startups, Somaini said he is eager to deepen his relationship with YL Ventures and assist early-stage cybersecurity startups coming out of Israel to scale their businesses globally.
“I’ve been collaborating with YL Ventures for some years now and know they have unparalleled access to Israeli cybersecurity talent and innovation,” he said. “I’m looking forward with great anticipation to working more closely with the entrepreneurs the fund selects to help them bring the next wave of technological innovation to market.”
Based in both Silicon Valley and Tel Aviv, the firm has early and deep access to the Israeli entrepreneurial ecosystem as well as an active presence and strong network in the U.S.
“Out of the hundreds of startup ideas we evaluate every year, we only invest in the select few we believe are the most brilliant. This enables us to truly partner with the founders, actively support each company and give it the full attention it deserves,” said Schreiber. “We then leverage our Silicon Valley presence to create business opportunities and guide founders through the challenges of penetrating global markets and building great companies. It’s a model that is not easily reproduced and creates a true win/win for entrepreneurs and investors.”
This model has yielded a track record of successful exits. The combined funds, YLV I and II, have invested in 10 companies, five of which have already been successfully acquired. Most recently, FireLayers (cloud access security broker) was acquired by Proofpoint, and BlazeMeter (performance testing platform for DevOps) was acquired by CA.
Among the current YL Ventures portfolio companies: Twistlock, (virtual container security), which last week announced a $17 million Series B funding round; Karamba Security (Autonomous Security for autonomous and connected cars); and Hexadite (security orchestration and automation).
Yair Grindlinger, FireLayers co-founder and now vice president of Information Protection Products at Proofpoint, said, “YL Ventures was not just an investor, they were an integral part of our team and essential to our successful exit. YLV’s entire model is built around helping entrepreneurs. They commit time and resources and continue to back the companies over the long-term.”
About YL Ventures
YL Ventures is a seed-stage venture capital firm that invests in cybersecurity, enterprise software, autonomous vehicles, drone technologies and VR/AR companies, with particular focus on the Israeli market. Currently investing out of its $75 million third fund, YL Ventures accelerates the evolution of portfolio companies via strategic advice and Silicon Valley-based operational execution.
1 Cybersecurity $202B market by 2021; Enterprise Software $357B market in 2016; Drones $127B by 2020; Autonomous Vehicles $70B by 2030, VR/AR $162B by 2020. Source: Markets&Markets, Gartner, PWC, Intel, IDC