Israel-China Blueconomy fund raises $150m

Yuval Rabin Photo: Yediot Ohad Tzvingberg PR

The fund provides Israeli companies with direct access to investments from the Chinese government.

Chinese investment fund Blueconomy Center has raised $150 million from the Chinese government and public funds for investing in marine and environmental technologies in Israel. Managed by CEO Shalom Daskal, Yuval Rabin (son of late Prime Minister Yitzhak Rabin) and Jacob Kaplan, the fund provides Israeli companies with direct access to investments from the Chinese government. It completed its financing round in six months, and is already considering immediate investments in four Israeli companies.

Blueconomy said it would focus on Israeli companies based on knowledge and intellectual property. In its initial stages, the fund will invest in technologies such as wind, wave, and solar energy; marine food, green and blue algae-based materials; drugs, cosmetics; artificial islands; sewage management; water purification and desalinization (in which Israel specializes); and even construction materials.

According to the fund, it is already in advanced negotiations for investments in four Israeli companies, after examining over 40 companies over the past six months.

Blueconomy's financing round was completed six months ago, after meetings with eight Chinese government delegations visiting Israel. The partners made presentations to and held meetings with representatives of the Chinese government and public funds, which have made marine technologies part of their investment strategy.

Daskal, who founded Blueconomy, said that the governmental involvement in technology investments would help Israeli companies expedite their entry into the Chinese market, and would also add protection for the intellectual property rights of Israel technologies. "Marine technologies are relatively new in the world as an investment sector," Daskal told "Globes" in explaining the background for the fund's establishment.

"I and my partners have been in high tech for many years. Last year, we noticed that a lot of companies looking for investments were interested in this sector in Israel. Because this sector is not within the range of investments by funds founded in Israel, however, a vacuum of investment opportunities has been created. At the same time, I once took an Israeli company, China Wafer Level CSP, and made it a partner of the Chinese government. This company became an Israeli-Chinese success story, and is now traded on the Shanghai Stock Exchange at a $1 billion market cap. So I contacted the connections I made in China, and got enterprises there interesting in the idea of investing in marine technologies. To my surprise, the Chinese government devised a five-year plan of strategic investment targets, and one of them was the marine sector. I therefore connected the wonderful Israeli entrepreneurship in this sector with the Chinese market and its hunger for such technologies."

"Globes": How does the fund's work square with the new restrictions on Chinese investments announced last week?

Daskal: " These restrictions apply to many sectors, other than those that China has classified as strategic for the Chinese government, and the marine sector has indeed been classified as strategic. China has built a model for this purpose that we are actually the first to apply, in which there is an Israeli-Chinese fund with joint management. 20% of the amount is invested directly by the Chinese government and 80% by Chinese institutions adopting the government policy as their own investment policy. That's what created the opportunity to start the fund."

How much will you invest in each of the four Israeli companies you have already located.?

"We're planning on investing an average of $5 million in the candidates for investment. It can be in one or more financing rounds, depending on the stage the company has reached. We also have a mandate to invest up to $20 million in a company with more advanced business maturity once a year."

Rabin is chairman of Beyond Verbal Communication, an Israeli company trying to analyze emotions on the basis of verbal communication.

Published by Globes [online], Israel Business News - www.globes-online.com - on January 30, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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Yuval Rabin Photo: Yediot Ohad Tzvingberg PR
Yuval Rabin Photo: Yediot Ohad Tzvingberg PR
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