Australian First:-Israeli venture partnership launches new Venture Credit Fund to invest in high-growth technology companies
05 August 2018
OneVentures partners with leading Israeli Venture Lending firm Viola Credit to launch OneVentures Credit Fund
Left to right: Assaf Wahrhaft (Partner, Viola Credit), Dr Michelle Deaker (Managing Partner, OneVentures) & Ruthi Simha (Founder & General Partner, Viola Credit).
Sydney, AU, 6 August 2018 – OneVentures, an Australian venture capital firm which invests in innovative technology and healthcare companies solving global problems, has created the first partnership with an Israeli venture lender Viola Credit, part of Viola Group, Israel’s largest technology investment group managing US$3B. The partnership will launch a new venture credit product into Australia through a $100M dedicated credit fund. The Fund will be launched to investors this month and is expected to reach first close by November.
Dr Michelle Deaker, Managing Partner at OneVentures said venture credit in the United States, Europe and Israel represents up to 25% on average of later venture capital financings in companies and 10 to 15% of total venture funding. In the US alone $5B is invested per annum through direct credit funds including such deals as Facebook, Google, Box and others when they were in earlier growth stages. The product is preferred by entrepreneurs and shareholders because it can be less dilutionary on equity and additionally may extend the capital runway to achieve important company milestones. For investors in the fund, the product has a lower risk profile than venture equity and a regular return so is preferred by many investors over venture equity.
Deaker commented that because the product is still in its infancy in Australia, it is hard to find relevant expertise despite the large market need driven by the growing innovation economy and an estimated $1.9B in available equity investment. OneVentures has therefore chosen to partner with Viola and hire quality management from offshore into the firm.
Ruthi Simha, co-founder and General Partner at Viola Credit said, “Viola Credit is looking to bring its knowhow, skills and deal making experience to Australia through the partnership. Viola Credit has deployed US$800M in over 120 deals and is backed by leading global investors, pension funds and financial institutions. Viola Credit is interested to expand into the Asia Pacific region and we see the opportunity to do this with partners. OneVentures is our first partner in this region and will additionally be the first to receive the offer to partner on new products for Australia.”
The partnership will enable Viola Credit to form part of the fund team supporting deal screening, structuring, investment decision making and portfolio company reviews. The Fund will invest in high-growth technology companies with strong revenue looking to accelerate their business, or companies wanting to diversify their funding sources during capital raising rounds.
The Fund has received strong early interest from investors. The main benefit to investors is a favourable IRR at a lower risk profile to venture equity including ongoing annual coupons with additional upside through the taking of warrants in the investee companies. Dr Deaker said, “many of our investors are over-weight in the property market often through the provision of mortgage funding to developers. They are looking for a product which has similar characteristics of a regular return and can outperform the market.”
Viola Credit and OneVentures were introduced by the Australia Israel Chamber of Commerce during the Trade Mission led by Nicholas Moore and attended by Dr Michelle Deaker in September 2017.
Michelle Blum, CEO of the AICC, said “the purpose of the trade missions is to generate bilateral trade and co-operation between Israel and Australia. We are delighted that the trade mission has led to such a significant partnership for our two nations.”
Dr Deaker sees the new fund is supporting the Australian Government’s Governments National Innovation and Science agenda, by broadening the mix of funding options available to emerging high growth Australian technology companies. OneVentures has three major funds and AU$330M in funds under management including AU$105M which it manages for the Australian federal government through the Innovation Investment Fund and the Biomedical Translation Fund programmes.
Viola Credit and OneVentures hope the partnership is the first of many initiatives between the firms, and will strengthen mutually sustainable relationships between the innovation ecosystems of the two nations for the future.
OneVentures is one of Australia’s leading venture capital firms, with over $330M in funds under management. But we do more than invest. We take companies to that all important next stage, by actively shaping their future. We apply our years of international experience, operational and executional expertise to accelerate the growth of our portfolio companies.
A global growth focus drives our investment selection with our current portfolio including companies with truly innovative products tackling multi-billion-dollar problems, from needle-free vaccinations to virtual communications to adaptive e-learning.
Game changers, that deliver lasting gains.
Learn more at www.one-ventures.com
About OneVentures Credit Fund
The OneVentures Credit Fund will launch in August 2018 and is expected to reach first close by November 2018, with up to AU$100M in funds available for high-growth technology companies. The fund expects to make approximately 40 investments
The fund is focused on later stage companies with strong revenue growth looking to accelerate their business, or companies looking to incorporate venture credit within the funding mix of their capital raising round. Venture credit provides a longer capital runway, allowing companies more time to achieve important milestones before a subsequent round of financing.
The fund will be seeking technology companies with a strong product market fit and high revenue growth. The fund looks to invest between AU$500k and $5M into any one company.
Learn more at www.one-ventures.com.au/funds
About Viola Credit
Viola Credit, established in 2000, was the first venture lending fund in Israel. Since fund inception, Viola Credit has invested in over 120 transactions generating strong venture debt returns. Viola Credit is part of Viola Group, Israel’s largest and most diversified tech-focused asset management house in Israel. Viola Group manages a total of approximately $3 billion USD across five independent partnerships (Viola Credit, Viola Ventures, Viola Growth, Viola FinTech and Viola Partners).
Learn more at www.viola-group.com.