Pitango Venture Capital has launched a new venture capital fund that will operate in the Israeli-Arab community. The fund is called Al-Bawadir ("buds" in Arabic). Pintango is following in the footsteps of Jerusalem Venture Partners (JVP) and Viola Partners.
Al-Bawadir will invest NIS 177 million in Arab-Israeli ventures. The government provided NIS 80 million, and Pitango general partners Nechemia Peres, Rami Kalish and Zeev Binman, along with private investors, provided the rest.
Al-Bawadir will begin operating soon. Its mandate includes making investments within five years, after which it will help the portfolio companies expand and provide other assistance. Al-Bawadir will be managed by Jimmy Levy, the founder and a director of Nazareth-based Galilee Software Ltd. and former executive at Comverse Technology Inc. (Pink Sheets: CMVT); and Habib Hazan, a former executive at McKinsey & Co.
Kalish will be a director of Al-Bawadir. He emphasizes that the fund's private investors are unconnected with Pitango and its venture capital activity. "This is a completely new fundraising," he said. Al-Bawadir will invest in private manufacturing and services companies, as well as in high tech, with 60% of funding channeled to manufacturing and services companies, and 40% - NIS 70 million - to high tech.
Kalish says that the experience of Pitango's team will help improve the performance of Al-Bawadir's portfolio companies. "Our experience will improve the companies, and our connections can grow the companies, and not just for the Arab community."
Kalish adds, "We have here a financial and business opportunity that could pay off handsomely. It may also be very significant step toward integration of the Arab community in Israel." He believes that Al-Bawadir will make its first investment within a few months, and said that it was already reviewing options.
As for possible high-tech activity that might interest investors, Kalish says, "There are a lot of opportunities in this sector, which can be reflected in regional activity. There is no reason why the Arab community shouldn’t be at the technology spearhead. Cellular applications and Internet content are fields in which the Arab-Israeli community could be a leader, outside of Israel as well."
Published by Globes [online], Israel business news - www.globes-online.com - on February 7, 2010
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