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Strategy Session: Hetz Ventures Focuses On Israeli Entrepreneurs For Second Fund

Strategy Session is a feature for Crunchbase News where we ask venture capital firms five questions about their investment strategies.

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Hetz Ventures closed on a $77 million second fund that will invest in Israel-based companies in the B2B enterprise technology space.

The Tel Aviv-based venture capital firm was founded in 2018 by Andrew Feldman, Stuart Roden and Judah Taub, as a seed VC and now has more than $130 million under management.

Hetz’ first fund was $55 million and invested in 10 companies including: Trigo, an AI and computer vision-powered provider of a frictionless shopping experience; Granulate, a company that optimizes infrastructure and workload performance in real time; and Codota, a startup developing a platform that suggests and autocompletes Python, C, HTML, Java, Scala, Kotlin and JavaScript code.

Judah Taub, Hetz ventures

Taub, managing partner at Hetz, discussed the fund’s strategy with Crunchbase News.

Tell us about the new fund.

We raised this fund completely during the COVID-19 pandemic, starting in April and closing in July. We make early investments solely in deep tech, especially in techy founders going after big markets. The vast majority of investors came out of Israel.

We plan on investing in between 12 and 14 companies, and we have invested in two companies with the new fund, but they have not been announced yet.

What’s your investment strategy?

For every dollar invested, we reserve two. We are high-conviction investors, and when we invest we often know how this will play out. From the first meeting with a founder to the investment, it typically takes the firm four weeks or less and we have never given a term sheet. We often double down in the B2B enterprise tech space and will write slightly larger checks. With this fund, it has been $1 million to $3.5 million so far. We are winning deals more than ever so we get to cherry-pick.

Within the B2B enterprise tech space, what are the hot areas?

We think artificial intelligence, development operations, fintech and cloud computing. For all of those areas, there is no better place than Israel. The country’s entrepreneurs are having a  disproportionate effect on the world.

Do you have any plans to invest in U.S. companies?

We’ve invested in multiple companies that sit in the U.S. As our companies progress, they usually always move to the U.S., and the vast majority have already acquired U.S. clients and offices. We push our startups to go global faster than others.

How has the pandemic affected your portfolio?

We are bullish on COVID-19. Our companies look for a crack in the market, and it is an earthquake right now. We measure startups every quarter, and in the last two quarters our companies have shown higher results than ever in quality and quantity. That is another point that allows us to attract other companies. In fact, we are run by young, agile individuals, just like a startup, so the people running Hetz today are the people we invest in typically.

Illustration: Dom Guzman

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