At the 2016 NOAH Conference in London, iAngels’ founding partner Mor Assia discusses key challenges and opportunities that lie ahead for accredited investors. In times of volatility and slowing economic growth, investors look to innovation as the main source of wealth creation. After all, asset classes where you can see the potential to 100x your money are few and far between.
In this talk, Mor Assia discusses the importance of creating a diversified portfolio and how Israeli high-tech fits into the global economy. In a mobile-first world, learn how iAngels has pioneered a fresh approach to angel investing from the comfort of your smartphone. Combining prominent co-investors with thorough due diligence, iAngels provides visibility and access to proprietary dealflow, changing the way that accredited investors build exposure to the venture capital asset class.
Watch Mor showcase the iAngels due diligence process on stage at the 2016 NOAH Conference, the preeminent European event where Internet CEOs, executives and investors gain deep insights into the latest proven concepts, network with senior executives and establish new business relationships.
KamaTech, an accelerator for ultra-Orthodox start-ups in Israel, and the Israeli investment network iAngels, launched the first VC fund exclusively for Haredi entrepreneurs in Tel Aviv on Wednesday. In the next three years, the fund, called 12 Angels, will invest some $5 million in about 30 companies focusing on education technology, e-commerce, artificial intelligence, cybersecurity and fintech.
The initiative will help entrepreneurs establish their businesses in the rapidly growing ultra-Orthodox start-up scene, said KamaTech co-founder and CEO Moshe Friedman.
“For the first time, investors – not philanthropists – are putting their faith in the talent and commitment of Haredi entrepreneurs,” Friedman said.
KamaTech was established in 2013 as an accelerator for Haredi entrepreneurs. The organization helps members of the community who have a good business idea but few technical or business skills. Benefits for those who participate include personal mentors from leading entrepreneurs in the Israeli high-tech industry, help from law and CPA firms on copyright, financing and other issues, a free project development team, and assistance in hiring, financing and presentations.
iAngels, one of Israel’s leading investment networks, was established three years ago, and now employs 20 professionals. It has raised $50 million and invested in over 60 start-ups, according to Mor Assia, who founded iAngels with Shelly Hod Moyal.
iAngels named Israel’s Top Fintech Investor
Geektime has ranked iAngels top of its Fintech Investors Index for the first half of 2016, following investments such as Zooz, Simplex and TravelersBox. For the full story, click here.
iAngels raises $15 million for startup investments
iAngels, an angel investment platform that enables accredited investors globally to co-invest with prominent angel investors in Israeli startups, has raised $15 million from European, Asian and U.S. financial institutions, for a fund targeting investments in early-stage Israeli startups. The fund will focus on companies in the areas of fintech, enterprise software, artificial intelligence, smart cities, cyber security and IoT. The announcement takes the total capital raised by the investment company to $50 million, in the three years since it was founded by Shelly Hod Moyal and Mor Assia. In that time, the company has invested $20 million in 63 portfolio companies.
The iAngels model allows clients to choose from companies vetted by its partners, for investments of $10,000 or more. The new fund will act as a co-investor, putting between $250,000 and $1 million into early-stage portfolio startups. “The fund was formed to provide a supportive home for promising startups at the outset of their growth, to answer not just their funding needs, but to accompany them through their various stages of development, regarding strategy, growth, and future funding rounds,” Assia said. (Eliran Rubin)
If you’re a smart investor or just tech savvy, you are probably curious about the Israeli startup scene. There is no doubt that the startup ecosystem in Israel is amongst the most successful in the world, so if you are interested in either investing, or just learning more about what’s going on here, keep reading!
It’s not every day that I get an opportunity to connect with a high powered and influential woman such as Shelly Hod Moyal. In between running an incredibly innovative and successful investment company and taking care of her kids at home, she made the time to answer some questions for Puzzle Israel about herself,iAngels and the Israeli startup scene, and the budding partnership forming between Puzzle Israel and iAngels.
A bit about Shelly, her partner, and how they got started
Shelly’s background is financial, spending years on Wall Street, working as a wealth management associate at UBS, then at a hedge fund as a research analyst, and finally as an investment banker at Goldman Sachs. Since graduating college, Shelly has been involved in analyzing investment opportunities for individuals, institutions and companies. Her main interest, though, remains creating a vehicle that helps angel investors evaluate opportunities and build a responsible and manageable portfolio through co-investing with top performing investors and maintaining hands on involvement to improve performance of investments.
Shelly met Mor Assia, the co-founder of iAngels, about seven years ago while Mor was getting her MBA at Columbia, and they instantly became great friends. Mor and Shelly both married “serial entrepreneurs”, as Shelly put it. Mor’s Husband is Yoni Assia, the Founder and CEO of eToro, the world’s leading social trading network Yoni’s father, also the chairman of iAngels, is David Assia, is a serial entrepreneur as well and one of the leading and most prominent angel investors in Israel. Shelly’s husband, Kfir Moyal is one of the founders of Matomy and is the general partner of a micro VC, Cyhawk Ventures, which invests in early stages of new media and advertising technology.
How iAngels all began
One of Israel’s nicknames is “The Startup Nation”, because more and more entrepreneurs and innovations with fantastic investment opportunities are popping up every day. In light of Shelly and Mor’s connections with investors and companies abroad, they realized that there is a major disconnect between the startup ecosystem in Israel and investors abroad who want to actively invest in early stage companies in Israel but don’t have an efficient way of doing so. They got to thinking, and knew that there had to be a way to spearhead this process. As industry insiders – they have the global perspective, analytics, and connections. They had done the research, they had a comprehensive list of successful investors and investments, and they realized that starting iAngels was well within reach. At that point, the main goal was bringing investors into the Israeli startup landscape, which is constantly growing and succeeding.
Israel: the “Startup Nation”
In Israel, for every one million people there are 375 tech startups. The country in second place is the US, with about 180 startups per one million people. That means that Israel has more than twice the amount of startups per one million people than the USA. From instant messaging toWaze, the world’s largest community-based traffic and navigation app, thousands of startup ideas have come out of Israel. There’s a reason the term “startup nation” was coined about Israel. About 8% of the total population works in high tech, a percentage that is virtually unprecedented in any other country. So why is it that so many successful ideas come out of this small country? According to Shelly, the first factor that brings about the entrepreneurs is the Israeli “hutzpa”, or direct, risk driven “go-getter” personalities. The risk disposition has other drivers. For example, in Israel the standard talented engineers are recruited straight out of the most elite IDF intelligence unit, arriving to the high tech field young and motivated with five years of top class training and experience behind them.
A nation willing to take a risk is a nation bound for success, making Israel the perfect platform for high risk high profit endeavours.
iAngels and Puzzle Israel
Puzzle Israel is dedicated to showing tourists the real Israel, the textural and colorful cultures and subcultures of society, and the real people behind the faces seen in the media. One of the most prominent cultures in Israel, as we can understand from Shelly, Mor, and iAngels, is the startup culture, and Puzzle Israel is ready and proud to show travelers this part of the real Israel. In keeping with the goal of experiencing all the culture that Israel has to offer, meeting two strong and significant Israeli figures such as Shelly and Mor provides a sneak peak into the people behind the culture that is the startup nation.
From funding to savings, these brilliant companies create solutions that move people and companies forward.
1. Danish Ventures has created a fund that targets design-focused but scalable companies solving some of the world’s biggest problems.
2. Users of Qapital, a personal savings app, set spending rules for themselves. When they break those rules, money is automatically placed into savings.
3. Aspiration makes investing accessible: For $500, invest in one of its funds. Its “pay what is fair” model gives customers the option to choose zero fees.
4. Online credit marketplace Fundera helps VC-less startups snag small investments from trusted enders. It takes a 1 to 3 percent fee from lenders (rather than tax borrowers) and has helped secure $140 million for more than 2,500 businesses.
5. Earnest helps refinance those dreaded student loans by using career and financial histories to determine a borrower’s ability to pay, and saves borrowers an average of $18,000 over 10 years.
6. Microfinance startup First Access uses prepaid mobile-phone payment histories to quickly and affordably predict credit risk for borrowers in developing markets.
7. iAngels, an Israel-based equity crowdfunding platform, helps international private investors access early-stage opportunities alongside Israel’s leading angels.
8. Painless1099 helps freelancers save for tax season, automatically putting away the proper amount before payments route to a checking account.
9. New to investing? Simply Wall St. turns stock data into simple, helpful graphics.
10. Fastacash, which recently closed a $15 million Series B round, wants to make sharing money with friends (and paying brands) as easy as texting.
Israel, also referred to as the “Startup Nation,” possesses one of the most active and innovative startup ecosystems globally. Not only does it have the most startups in the world on a per capita basis, its entrepreneurs are way ahead of the curve when it comes to building products that people need.
You may not know it, but every time you use an Apple product, utilize Google’s navigation tech, or even insert an innocuous USB drive into your laptop, you’re benefiting from technology developed in Israel. Little wonder that the ecosystem raised US$3.6 billion in funding last year, helping investors gain 50 percent on each dollar invested.
That’s the opportunity equity crowdfunding startup iAngels hopes to expand. The site is trying to equalize the playing field for global investors by helping them get a slice of the action and providing local Israeli startups better access to capital.
Built by experts
iAngels was founded by Mor Assia and Shelly Hod Moyal, both of whom have a finance and technology background. Mor graduated with an MBA from Columbia Business School and worked at IBM prior to launching the venture. Shelly’s a graduate of Northwestern, with previous jobs in Goldman Sachs and UBS. They believe their combined experience serves them well when it comes to building networks, scouring for the best deals, and building a product that resonates with angel investors worldwide.
“We were motivated by the challenges faced by entrepreneurs and investors worldwide,” explains Shelly. “We saw […] promising Israeli startups raising seed capital in Israel and then flying all over the world to find additional investors. We also saw investors […] wanting to invest in Israel but not having a professional vehicle […] and we felt there’s got to be a better way to connect the [two].”
Despite the robust investment space in Israel, Mor says there are still hurdles that prevent entrepreneurs from securing seed capital.
Angel investors in the country are usually entrepreneurs who have successfully exited from multiple startups, as well as high net-worth individuals who’ve made their riches in real estate, finance, or other verticals. There are also a number of ‘micro-VCs’ looking to invest anywhere between US$500,000 to $1 million in seed rounds.
But the traction needed to successfully close a seed round remains high. The startup must already be revenue positive, have customers, proven concept, or engaged in deeply futuristic tech that requires substantial amounts of capital to scale up.
“In general, the capital available for early-stage startups has increased, but this does not mean its easy to raise seed rounds,” Mor adds.
High quality deal flow
For investors looking to sign up to be a part of the network, the process is fairly simple and straight-forward. But that belies the frenetic work that takes place behind the scenes to ensure only the most promising startups are selected for investment.
The first stage in iAngel’s vetting process is its exclusive list of 30 ‘lead angels’ who refer companies back to it. The angels have been identified after research and analysis of all the mergers and acquisitions as well as IPOs that took place in Israel over the past decade. Shelly explains their research indicates that top quartile angels in Israel generated 80 percent of financial returns, hence presenting a “compelling opportunity” for a co-investment model.
In addition to the recommended companies, the iAngels team also keeps a close eye on emerging startups by attending community meetups, trade shows, accelerator demo days, and other networking events. On average, they analyze between 100-120 deals every month, and accept only two for investment. That’s a rejection rate of over 98 percent.
Investors also have to meet one specific criterion, although it’s not nearly as exacting as the ones portfolio companies are subjected to. Individuals seeking to co-invest have to be accredited investors in the country they’re based out of. For example, in the US, this means they must have US$200,000 in annual income or US$1 million in investable assets. Exact standards vary by country, but there is no other requirement.
Most investment activity has originated from the US, Hong Kong, China, Canada, Germany, and Australia.
To ensure there’s maximum value for both investors and founders, iAngels deploys two models in parallel. The first one is the ‘portfolio model,’ where investors commit a certain amount of capital that will be assigned automatically once a startup has been approved by the investment committee. After that round, the startup extends the deal to the rest of its network of investors, who then evaluate the offer on their own metrics and decide whether to invest or not.
The minimum amount of individual investment for each deal is US$10,000.
Since launch two and a half years ago, iAngels has facilitated 50 investments and deployed nearly US$17.5 million in investor capital. Two of its portfolio companies have already been acquired by bigger players. Big Blue Parrot, a social poker application, was bought by online gaming giant Playtika, and MyRoll, an intelligent photo organizer, was acquired by AVG.
Mor adds that they haven’t had to write off any investment yet either.
The startup itself raised US$14 million in series B funding led by Australia-based Thorney Investment Group in March. It doesn’t take any fees from entrepreneurs but does charge investors a 5 percent ‘administrative fee’ after each round closes, along with additional costs based on performance.
The investor community is spread across 40 countries.
Every investor has access to a personal dashboard which contains a comprehensive profile on their investments as well as updated information on how portfolio companies are performing.
Shelly explains that they’re in the process of building a ‘secondary market,’ where existing investors and portfolio company employees can sell their shares within the iAngels community.
In some ways, iAngels also strives to act as a business accelerator. All portfolio companies go through monthly feedback sessions where topics like strategy, fundraising, and customer acquisition are discussed. Furthermore, because its investor network is made up of over 4,000 people in 40 different countries, iAngels is able to leverage these numbers to help entrepreneurs.
Shelly does predict eventual consolidation in the equity crowdfunding space, mainly due to a ‘proliferation of platforms,’ but says iAngels is well-positioned to weather the storm. She says only those startups that are able to deliver value to investors will prevail.
“This is why we chose to create a platform that looks after the investors interests, provides high quality deal flow, reporting, and transparency. Standardizing these processes and creating best practices in angel investing is a big part of our mission.”
Israelis are among the smartest in the entire world.
I recently wrote about UpWest Labs, a venture fund in the Silicon Valley that scouts out the best entrepreneurs in Israel, invests in them, and brings them to the Valley. They are smart investors. They spend hundreds of hours researching the teams and entrepreneurs they ultimately invest in. They have a track record of success, so it seems all their time is worth it.
But what if you are an investor, or want to be an investor, and do not have the time to conduct all of the due diligence required to feel good about your investment? Wouldn’t it be amazing if there was a trusted company who did all of the homework for you?
Most investors I talked to responded with, “It would.”
This is the exact problem iAngels solves. The founders, Shelly Hod Moyal and Mor Assia, screen over 100 companies a month. They conduct all of the due diligence required of a prudent investor. They look at things like meeting with the founders, proof of concept, assessing scalability, checking up on references, examining their budget, analyzing the market and competition, evaluating the investment terms of the deal, and more. Of these 100 companies, iAngels will select two for the platform. Yes, 2%, so they are only bringing on the most promising companies to present to the investors that use their platform. The founders are well-equipped to run this venture, as they have a deep understanding of the Israeli market. They grew up in Israel, served in the military, and built relationships with Israel’s top performing angels and entrepreneurs. This all builds trust. Trust is the most important thing when it comes to investment, relationships, and growth.
They see their company as a disruption to traditional investing. Their platform provides investors the opportunity to sign up in less than 60 seconds. They do not have to conduct the dozens or hundreds of hours of diligence and research required in the traditional investing world. And it gets even better. They have access to hand-selected companies from the convenience of their home. They do not have to get on an airplane and travel across the world. They just open their computer. This democratization opens borders so investment is no longer limited to local transactions. iAngels is creating opportunities across cities and continents around the globe. They have investors from Israel, China, Australia, Europe, North America, and South America. This is truly bridging the gap between eager investors and high tech Israeli entrepreneurs. iAngels recognizes that Israeli companies are building products and services that are solving global solutions. Just as the issues are not limited to local solutions, investment should not be limited to local investors.
As you can imagine, iAngels embraces technology to bring a human element to tech investing. In addition to taking a data-driven analysis to their diligence, they understand the importance of relationships. For that reason, they have set up monthly webinars where their entrepreneurs share the story of their company, their background, vision, and answer questions at the end of their presentations. This virtual relationship building is also key to fostering trust between global investors and the teams.
I’d say IAngels did their due diligence. The result was a company that solves problems for the local entrepreneur, as well as a global investor.
That’s good business.
iAngels’ adviser Kfir Moyal reflects on 2015’s Adtech correction and the opportunities for investors in 2016
After years of VC exuberance, 2015 marked the end of an investment cycle for the adtech industry. Quite a few companies with high valuations stumbled, downsized, restructured and pivoted in order to achieve, or at least progress on a path toward, sustainable profitability.
Yet, despite the contraction in VC investments, the industry is growing dramatically, fueled by agencies and advertisers competing for digital real estate across billions of screens, with billions more forthcoming in the next few years. 2015’s correction sets the stage for adtech to “grow up” in 2016, especially in terms of ad quality and industry structure.
The first trend I expect in 2016 is a spike in contextually relevant ads (CRAs), like native advertising, that blend well with the user experience. Nearly 200 million ad blockers cost publishers $22 billion in 2015, an impact far from trivial. If consumers continue to face harassment from unwanted ads, this figure could double or triple in the upcoming years.
The antidote: CRAs. We’ve witnessed Google command significant premiums from advertisers for more than a decade by serving CRAs along the search dimension, while Facebook’s dominance derives from the wealth of personal data it collects on each user and its ability to seamlessly integrate relevant advertising in the newsfeed experience. In the last few years, Outbrain and Taboola have leveraged content consumption patterns to create an entirely new category of CRAs known as sponsored content/native advertising.
Even today, I find myself still clicking on sponsored content, thinking it’s native. It’s not that I’m being tricked, like with pop-up ads or clickbait; rather, the contextual relevance of the ad suits my interests. It’s nicely integrated in the page and is truly relevant. Contextual intelligence is a meaningful point of differentiation that leads to higher ROI for advertisers and publishers, and thus, the adtech companies that improve the marketer’s ability to provide the right message to the right person at the right time will attract substantial investment.
The second trend we will see is hyper-personalization, with a special focus on what I will call the “smart creative.” During the last few years adtech has focused on data collection and analysis in order to better target consumers, optimizing yields for both advertisers and publishers. Yes, we’ve improved on many different fronts, but the ad creative has remained flat and static. Thanks to the death of privacy, we now have an abundance of data that can be used to make each creative hyper-personalized and much more engaging for the consumer.
In 2016 we will see creatives that change on-the-fly based on each user’s unique characteristics rather than fixed images that are mass-distributed, and smart programmatic creative will become the standard.
The third trend to consider is consolidation. The artificial silo between adtech and martech is crumbling. Despite the pace of advertising innovation the past 15 years, the complexity of adtech as a technology stack inhibits brands, agencies and marketers from seamlessly integrating digital advertising into their full marketing stack.
In 2016, we’re going to see companies like Oracle, SAP, Salesforce, AOL, Google and Facebook beefing up their martech war chests. These incumbents will snap up new entrants to enhance and complete their martech stack in a way that they can really become a one-stop shop for marketing and adverting in a digital manner. This trend is buoyed by increasing demand for accountability from premium brands (after the 2015 AppNexus’ cleanup that shined a spotlight on the pervasive fraud affecting marketers’ ROI).
We’re going to see the CRM technology, the marketing automation technology integrated into the DMP and the DSP and the attribution solutions, the tracking vendors, all coming together into one platform that makes it much easier for the marketers to execute multi-channel, orchestrated campaigns that take advantage of data.
On the monetization side, we’ll see more and more consolidation. Adtech and martech is, in particular, an industry where size is a major advantage. We’re seeing it even with Israeli companies like Taboola and Outbrain that are discussing a merger among themselves. I bet we’re going to see it more. We’ve seen AOL buying Millennial Media, Vidible and Convertro to make it easy for brands and agencies to advertise across their destination properties like TechCrunch, Huffington Post and MapQuest.
We’re going to see that further into 2016, all across the board, either where the marketing players are going to buy the adtech players or the adtech players are going to buy the marketing players.
As an iAngels advisor and general partner at Cyhawk Ventures, I am evaluating companies in the context of the themes outlined above. In light of adtech’s 2015 correction, startups that “face the mirror” will grow fast in 2016, in a much cleaner and accountable environment. This means they will be well poised to attract investments from multiple funds, and the adtech financing environment will get back on track.
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