Wednesday, January 28, 2015

Israel VC Singulariteam Raises $102M Backed By Tencent, Renren Founders

Tel Aviv Venture Capital Fnd Singulariteam is announcing that it has closed its second fund — $102 million from LPs that include co-founder of China’s Tencent Mr. Vic Lee and Renren's founder — that it will use to invest in local startups and those with root.

Vic Lee is former senior executive vice president of Tencent, the largest Internet service provider in China. He joined Tencent in 1999 and was responsible for planning, construction and managing the operation platforms, including technical architecture, information security, payment settlements, business intelligence, sales channel connection, fundamental IT, applications maintenance and customer services.

Singulariteam was originally founded in 2013 under a different name, Genesis Angels. (It rebranded to avoid confusion with a similarly-named, older VC in Israel.) Led by entrepreneur Moshe Hogeg — he of Mobli and Yo — the original mission was to focus investments into new areas like machine learning, artificial intelligence and robotics. That’s pretty much what the team has done. Its first fund of $100 million — which came entirely from entrepreneur Kenges Rakishev was spread across 12 startups that either develop tech directly in these areas (General Robotics, VR eyewear company Meta and Beyond Verbal for example) or use it within more general consumer applications (such as photo sharing app Mobli, Sprylogics and Yo).

The $102 million fund widened the investment pool from Rakishev to LPs from further afield.

China’s Tencent is behind a number of leading services, including the instant messaging app WeChat. Tencent has a market cap of $200 billion, is the second in size in China (after Alibaba) and is one of the world’s biggest companies. Renren is the company behind the “Chinese Facebook,” and has a market cap of $900 million.

Hogeg explained that the Chinese investments in the fund will make it possible for the companies in the investment fund’s portfolio to enter the Chinese Internet and digital markets more easily. With regards to Rakishev, Hogeg said, “Unlike the previous fund, which Rakishev led, this time, he is still a significant investor, but not a leading one.”

“When we launched the first fund, we decided to bring a new methodology, where we serve as half angel investor, and half investment fund. We invest in the very early idea stages, but instead of investing $100,000, we invest $1-2 million at the idea and presentation stage,” Hogeg explained.

"In our world, investing $1-2 million in initial stages is going after it aggressively. It increases the likelihood of success of the companies that we invest in significantly. There is a difference between a CEO who is worried about how to pay salaries tomorrow morning, and a CEO who has money in the bank and is focused on building the product and creating value,”

Hogeg added. Hogeg said that the new fund has already invested $20 million in start-ups, and the second fund’s portfolio already includes two companies that are developing mail apps - TL;DR, and Hop, alongside web-building platform Webydo, invest.com, Genesort, and the.net.



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