New investment fund aims to take Israeli start-ups public

Allot

24/12/2015 10:12

By Tova Cohen 
    TEL AVIV, Dec 24 (Reuters) - A new investment fund 
co-managed by Intel Corp's  INTC.O  former chief product officer 
is aiming to raise $300 million to invest in Israeli tech 
companies with the goal of eventually listing them on the Nasdaq 
stock exchange. 
    Eucalyptus Growth Capital plans to raise an initial 
$100-$140 million in the first half of 2016 from investors in 
the United States, Europe and Asia. 
    "The real dilemma for the Israeli tech sector is that while 
being extremely successful and important for the Israeli economy 
it does not create large companies. The tendency is for most 
companies to sell themselves off," David Perlmutter, managing 
partner at Eucalyptus, told Reuters. 
    Perlmutter was chief product officer at Intel from 2009 to 
2013. His partners at Eucalyptus are Rami Hadar, former chief 
executive at Allot Communications  ALLT.TA , and Eldad Tamir, 
chief executive of the Tamir Fishman investment house. 
    Tamir said the fund was looking at six companies with sales 
of over $30 million and noted companies seeking an initial 
public offering (IPO) need about $100 million in sales. Creating 
bigger markets for their products requires substantial funds and 
start-ups initially use most of their money from sales for R&D. 
    "We want to be the place to go to when you want a big check. 
If you want $6-$10 million go to a venture capital fund," Tamir 
said, noting that until now only a few private equity funds such 
as KKR  KKR.N  have been making larger investments. 
    Entrepreneurs that have already sold a company are often 
interested in building bigger firms with their second or third 
start-up, Tamir said. 
    Sectors of interest include enterprise software, e-commerce, 
video and the internet of things, he added.     
    Eucalyptus' advisory board includes former Intel Chief 
Executive Paul Otellini, former president of AMD  AMD.O  Atiq 
Raza, and Mellanox  MLNX.O  CEO Eyal Waldman. 
 
 (Editing by Mark Potter) 
 ((tova.cohen@thomsonreuters.com; +972-9-899-0222; Reuters 
Messaging: tova.cohen.thomsonreuters.com@reuters.net)) 
 
Keywords: ISRAEL TECH/INVESTMENT