When you combine Japanese and Israeli partners, it’s like having sushi with tahini: strange at first, but then it’s addictive. Aristagora VC, a venture capital fund that has already analyzed over 400 companies since its launch in September 2020, helps companies to enter the Asian market at Israeli penetration rates while meeting high Japanese standards. Since January, the fund has started dozens of global collaborations and invested in three companies in different fields. Over the rest of 2021, the fund will invest in seven to 10 more.
Led by Moshe Sarfaty and Anat Tila Cherni, Aristagora VC focuses on early-stage startups, bringing Japanese investors to the early-stage Israeli market. The fund is unique in that most of the Japanese players in Israel are corporate. Aristagora VC is the first private Japanese venture capital fund in Israel and the only Israeli-Japanese fund that is not a Japanese corporate VC.
“Interest from Japanese business factors in the Israeli technology market has been on the rise since 2015, when an exchange of visits took place between the Prime Minister of Israel and the Prime Minister of Japan,” said Aristagora VC President & General Partner Takeshi Shinoda, who manages the fund’s offices in Tokyo. “Closer government ties served to strengthen business relations between the countries and to increase business collaborations. While an increasing number of Japanese entities invest in Israeli companies and produce commercial collaborations, we are pleased to be among the only funds backed by Japanese institutional and private investors, not corporate VC funds. That difference allows us a free hand in terms of our investment strategy.”
One of the emphases of that investment strategy is helping Israeli entrepreneurs understand that for a company to reach advanced funding rounds in Asia, it needs to build a product portfolio that will focus not only on Western culture, but also on the East—and on Japan in particular.
As is well known, the Japanese are “early adopters.” They adopt groundbreaking technologies, but the investment strategy of most Japanese entities is at the asset class. In general, most Japanese investors prefer to invest in relatively mature companies after testing extensively and entering into a commercial agreement. In contrast, Aristagora VC focuses on companies still in the early stages of development. The fund serves as a springboard for young companies to penetrate the Asian market in faster Israeli time intervals but with higher Japanese standards.
Aristagora VC defines itself as a feeder fund for follow-on VC funds. In practice, the fund serves as a growth platform for young companies before later funding rounds in which follow-on VCs take the lead. Aristagora VC has developed relationships with angel investors and micro-VCs, on the one hand, and with most of the country’s follow-on investors and veteran growth VCs on the other. By bridging the two groups, the fund has already created unique collaborations in the first rounds of investment.
Aristagora VC focuses on deep technologies. The fund has chosen not to focus on a specific vertical, believing instead that young entrepreneurs need flexibility in the early stages and not unnecessary restrictions from investors.
Since January, the fund has invested in promising companies like:
- Nimble, the developer of the groundbreaking BeautyTech product that reached full funding within minutes of the launch of its phenomenally successful Kickstarter campaign. The company has already sold thousands of units of its revolutionary beauty technology.
- Suridata.ai, a cyber company that facilitates information security in large organizations, tracking confidential information by using machine learning and Natural Language Processing (NLP)
- Lynxight, which has developed a deep technology in the underwater vision sphere to identify potential drowning and hazards in large bodies of water while dealing with multiple events simultaneously.
All those investments were made side by side with top-rated investors from industry leaders such as IBI Capital, Entree Capital, Colorado Fund, Lion Bird, and other angel investors and incubators. As these investments show, Aristagora VC implements its declared strategy by focusing on deep technologies in a wide range of industries instead of any specific vertical, giving its companies the flexibility to adopt unique growth strategies so long as they grow. The fund strives to collaborate with investors, funds, accelerators, incubators, and VCs in Israel and around the world, always striving to provide real value to the fund’s companies and strategic partners.
Fund managers believe that working with young companies is significantly different from working with companies at later stages. It is therefore very important for Aristagora VC management to open the right doors for its startups in addition to making financial investments. Aristagora VC was established to help entrepreneurs support those places where an early-stage company may still be lacking while opening the company to new markets and additional opportunities.
In short, Aristagora VC aims to maximize the capabilities of entrepreneurs and help them survive the endless roller coaster of running a startup.