Lgilab

2007: a year of internet seed investment in Israel

TheCoils has a good post (in hebrew) that gives an overview on what happened in Israel regarding internet seed investments. 2007 was a very active year. Way more than 2006. I expect 2008 to be also an active one but many of those early investment will have to prove (including for our own portfolio companies) that a sustainable model is in place.

The interesting part of 2007 was that different models of investment were established in Israel and as TheCoils say, there is no Israeli VC that has not (tried to) put in place a special seed program to address correctly the internet companies.

If you can't read Hebrew there is a great table recapitulating the investment operations made over 2007 (click above to enlarge). The Internet Lab proves out to be one of the most active internet seed programs there. We are working very hard to make it also efficient and 2008 will be important for us in that respect.

Another trend i notices is that appetite from foreign investors (with no representation in Israel) for israeli startups: Mayfield, Spark, Mangrove (Zlio), Accel but also power angels Peter Thiel. And probably soon more (i heard about a deal or two coming up)

An important thing to spot is that many startups did not receive funding and probably won't. This is not necessarily a bad news: you do not always need VC money to succeed and you can build a very nice company without that (for example with angel money only). You can find some of those startups here

Finally 2007 was quiet in terms of M&A activity in Israel: all the attention was of course on Quigo (disclosure we invested in the new company of the founder of Quigo, Outbrain) that sold to AOL for 300+ m USD. Yedda was also acquired by AOL.

TheCoils should probably add also dPolls that was acquired by Toluna. 

2008 will reserve many opportunities for M&A as many startups will hit some nice milestones and some won't be able to pursue but still offer some nice assets to be acquired. The question will remain: Are we able to build giant internet players in Israel? I am not sure we will have the answer in 2008. Actually i think we won't. We'll need more patience for that.

2007 was a good year for the Israeli internet ecosystem and i think we are on a good learning curve. I am a bit concerned by the lack of developers and good wed design guys. But i am sure this will change soon. Really look forward for 2008

Technorati Tags: thecoils, internet, vc, startups, seed, investment

LGiLab invests in Bahu.com

We are announcing today a new investment in French startup Bahu.com promoting a European social network for young students across Europe (special south and eastern)focusing on promoting talents.

Bahu is a French startup created by two students and backed by Oleg Tscheltzoff a serial and successful internet entrepreneur i have known for some time now.

We know, the space is not virgin but we were impressed with Bahu achievements only a few months after they launched (already 2 million unique visitors and present in more than 6 countries in 4 months).

Investing in non Israeli related startup is not the first purpose of the Lab, but this was an opportunity that was not easy to ignore. We are committed to support israeli entrepreneurship. We already financed 5 israeli related projects and hopefully more soon.

I am happy to serve on the board of Bahu and face some very tough challenges that we have in front of us.

Btw why "Bahu"? In cool young slang french it means "High School"

Technorati Tags: lgilab, investment, vc, france, social network, bahu