Although it does not get much Australian press, OurCrowd is an investment platform which helps high net worth individuals and institutions invest in start-ups and venture funds.
Starting in 2013, and based in Jerusalem, the company has grown to have $1.8bn of committed funding across 300 portfolio companies and 18 venture funds. Today about 55% of the companies it funds are located in Israel, about one-third are in the U.S. and 10% are elsewhere ($38m in Australia).
OurCrowd has been successful for several reasons, however, their pitch is quite simple... “IPOs are being delayed for longer, which means private markets (e.g. VC) get to make more of $$$ than public markets (e.g. stocks) … but you cannot get access to that market unless you use OurCrowd”.An excerpt from their pitch is set out below
So what is the deal with this SPAC
Recent news has suggested that OurCrowd will go public via a merger with a special purpose acquisition company (SPAC). For those unfamiliar with a SPAC it is a public cash-box which exists solely to buy private companies (in layman's terms). If this is to go ahead, it will accelerate their ability to get capital partners and grow into other countries.
Sure - a large amount of the funding will be used to continue to grow Israel (home to 63 ‘unicorn’ startups, 12 minted in 2021) but Australia could get a small but meaningful share of this pie.
Where does Australia come into play?
OurCrowd moved to Aus in 2016 when the Federal government announced the tax concessions on VC. In the five years since this date… they have not raised a single fund.
Aussie VC has had a patchy growth in fundraising from 2016-2019 but since COVID-19 it has gained some real traction. In 2020, VC raised $1.3bn in new commitments across 10 funds (this is almost double what it raised in 2019) and 2021 has been even stronger.
VC deal flow in Australia
As you can see above, there was a big hiatus in Australian VC funding after OurCrowd's entry but they remain wholely under-invested in this economy.
To quantify this: Israeli VC investments total $9bn and Australian total $2.5bn. OurCrowd has c.$1bn in Israel so proportionately - Australia should have $250m of funding from this platform but it only has $38m.
Admittedly - there are many exciting innovations coming out of Israel and they have a longer history of attracting US capital than Australia; but even still Australia seems underserved.
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