Double closes for Israeli funds

Israel-focused venture firm Benchmark Capital has closed its $250m Fund II while Israel’s Carmel Ventures has raised $200m for its second fund.

Menlo Park-based venture capital firm Benchmark Capital has closed a $250 million (€193 million) second fund, while Israel-based Carmel Ventures closed a $200 million (€154 million) second fund as well. Both funds target Israeli technology investments.

Benchmark Israel II will focus on early stage software, Internet, applications and communications companies, and succeeds a $240 million vehicle raised in March 2001.

The new fund will be headed by general partners Mark Kremer, Arad Naveh and Nachman Shelef.

Benchmark, which manages more than $2 billion in committed capital from offices in Menlo Park, London and Tel Aviv, closed its second European fund in September on $375 million (€306 million).

Carmel Ventures II will focus on software and communications investments, and follows a debut $171 million fund raised in 2000 when the firm was launched.

Limited partners who committed to the new fund include the California Public Employees’ Retirement System, the Oregon Public Employees Retirement Fund, The Partners Group, DPartners, Pomona Capital, Citigroup, Grove Street Advisors and Siemens Venture Capital.

Carmel’s second fund will be run by general partners Shlomo Dovrat, Avi Zeevi, Harel Beit-On, Rina Shainski and Ori Bendori.

The funds are part of a new wave of fundraising by Israeli venture capital firms kicked off last year, ending two dismal years in which more capital was returned than raised. According to a 2004 summary published by the IVC Research Center, Israeli venture funds raised a total of $724 million (€557 million), leaps and bounds above the $14 million (€11 million) reported for 2003, and the $174 million (€134 million) actually returned to investors in 2002.

IVC estimates that approximately $1 billion (€770 million) in capital is now available for investment by Israeli venture capitalists, with an addition $1.5 billion (€1.15 billion) expected to be raised by 2005.