Magma Venture Partners is raising a $100-120 million third fund. The firm is following in the wake of Pitango Venture Capital, which is raising $350 million for its sixth fund.
This is a good time for Magma to raise a third fund, after two successful exits in the past year: the sale of Provigent Inc. to Broadcom Inc. (Nasdaq: BRCM) for $313 million in March, and the sale of fabless semiconductor company Wintegra to PMC Sierra Inc. (Nasdaq: PMCS) for $300 million in October 2010.
In Israel, Magma is one of the few firms that focuses on early-stage investments, which have been slowly been taken over by angel investors, resulting in a shortage of capital for new start-ups. The injection of fresh capital into the market will undoubtedly help entrepreneurs setting up new companies.
Magma is a boutique fund, which specializes in communications, semiconductor, and Internet companies. It has 18 active companies in its portfolio. 41% of its investments are in communications, 48% in semiconductor companies, and 11% is in Internet companies.
Magma was founded in late 1999. It is considered a second-generation Israeli venture capital firm. It was not based on the two government Yozma Venture Capital funds, but as a part of the operations of Magnum Technologies Ltd., an investment group owned by Zvi Limon, Shaul Shani, and Ron Zuckerman, businessmen who succeeded with Israeli technology companies in the 1990s.
Two of Magma's prominent portfolio companies are Waze Ltd., a provider of location-based services for social networks, and Valens Semiconductor Ltd.
Magma took care to raise small funds of $100 million. Its investment strategy is to invest in seed-stage companies and assist them, while keeping fairly large stakes in them. Magma managing partners Modi Rosen and Yahal Zilka are familiar with the Israeli industry as investors who prefer involvement in the companies they choose to invest in, which is why Magma takes care to invest in companies in industries and target markets the firm's partners know well.
Published by Globes [online], Israel business news - www.globes-online.com - on June 15, 2011
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