TAU Ventures, the VC of Tel Aviv University, raises a second fund of $50M for investment in startups
TAU Ventures, the investment fund of Tel Aviv University (TAU), has announced raising a second fund of $50 million for investments in startups, with the opportunity to grow the fund to $70 million.
The fund invests in early financing stages, often investing the first money in the company or after angel investment, a stage where there is a shortage in the industry. It intends to invest in 15 to 25 companies founded by Israeli entrepreneurs, with investment amounts up to $1 million per venture as a first investment.
TAU Ventures emphasizes creating value for entrepreneurs with various university resources. The fund focuses on backing strong teams of entrepreneurs across a wide range of sectors, understanding that at an early stage the product is expected to change.
All investors from the previous fund have reinvested in the current fund. Both funds were led by Chartered Group, which brings together many leading entities from the Japanese industry, plus new investors, including Family Offices in the US, Canada, and Europe.
TAU Ventures was established in 2018 by Managing Partner Nimrod Cohen, together with Tel Aviv University. Nimrod previously led first investments in companies such as HOUSEPARTY, Coralogix, WSC SPORTS, BRINGG, and YOTPO. This is part of a successful trend in the U.S. of leading universities including MIT, Berkeley, and Stanford establishing venture investment arms. TAU elected to establish a VC with interest in taking a leading role in early stage investments in Israel.
TAU Ventures’ first fund of $20 million began in 2018 and made 18 investments, including SWIMM, Xtend, Gaviti, MyAir, Castor, Medorion, and others. The first fund IRR is in the top 10% compared to all US funds from the same size and vintage.
“We are in a period where a lot of money is circulating in the market,” Cohen says. “However, this can be misleading, as there is still a shortage of investors in the early stages in Israel. More investors are operating in A or post-seed stages. They do not talk to entrepreneurs in the initial stages and rather want to see a product that has already reached the market. We are covering this critical stage enabling new companies to emerge.”
“As part of TAU’s strategic plan, we have made it a central goal to strengthen ties with industry here as well as promoting an international and multidisciplinary campus,” says Professor Ariel Porat, President of TAU. “TAU Ventures provides entrepreneurs with a platform with significant opportunities in innovation and making academic progress beyond the campus boundaries. It enables students to integrate practical experience with leading startups during their studies, and at the same time, it enables entrepreneurs to enjoy the diverse qualities of the campus. I’m happy in the given trust of the investors in TAU Ventures and I’m sure that combining forces between academia and industry will provide in the near future significant technological achievements that will benefit the entrepreneurs, the university and society at large.”