When Assaf Rappaport founded Wiz, he brought in a handful of high-tech leaders, including one unusual fund. Assaf Gilad Early in the previous decade, a young entrepreneur named Assaf Rappaport founded a startup called Adallom. Haleli Barath and Ofer Katz , founders of Cerca Partners, had a good gut feeling about him - and they weren’t wrong. In 2012, Adallom was sold to Microsoft for $320 million, and Rappaport eventually became the general manager of Cloud Security and then of Israel R&D for the software giant.
But then there was another turn of events. Rappaport identified a market opportunity, and together with three partners - Yinon Costica , Ami Luttwak and Roy Reznik - decided to leave Microsoft and establish a then-unknown startup: Wiz. In the first funding round, he agreed to work with only those who believed in him; the equally anonymous fund Cerca was one of Wiz’s first investors, along with angel investor Gili Raanan , Sequoia Capital, Index Ventures, and a few friends from Microsoft. The result is well known: Google is set to acquire Wiz for $32 billion.
Perhaps less known is that this move is one reason why Cerca is among the most profitable Israeli funds in terms of return on investment.
Cerca, the fund of the consiglieri or the fund of the service providers as it is known in the industry was founded by Haleli, a lawyer, and Katz, an accountant. They were later joined by cyber investor Ronnie Zahavi. Together, they have led Cerca’s investments in some of Israel's most prestigious unicorns, opportunities other venture capital funds would kill for.
Cerca managed to become involved in first funding rounds of companies such as Cyera (currently worth $6 billion), Island ($5 billion), Armis ($5 billion), HiBob ($3 billion) and Upwind ($1 billion). It has also invested in companies that have made successful exits, such as Granulate ($600 million), Ravello ($500 million), Axis Security ($412 million), Noname ($452 million), and companies that have made huge IPOs such as Fiverr.
Outside of Cerca, the partners have also been involved in the major IPOs of WalkMe and Wix. Together with OpenAI CEO Sam Altman they invested in Israeli AI cybersecurity platform Apex Security, which this year was sold to Tenable for $105 million. Cerca is also an early-stage investor in fintech, chip and quantum computing companies, and will expand into any sector where there is potential ROI.
"It's not the financial reports we provide to executives. It's the intimacy we create with the entrepreneurs and our involvement in a company's most critical processes," Katz says, explaining how the fund achieved a central position among the hottest companies. For him, the basic element for success is creating trust. "It's being involved in decisions, from choosing whether to hire a vice president or selecting investors, to being part of an entrepreneur’s divorce proceedings. Ultimately, it's a position of trust."
"We want to be the founders’ first phone call"
The second key to success, she says, is maintaining a non-threatening stance toward venture capital funds -which typically lead or manage such investments - as well as toward the entrepreneurs they support. "We’re not market makers, because we don’t set a company’s value," Barath explains. "We don’t take board seats, not even as observers. We just sit on the ticket of the follow-on investor who brings added value-and we want to continue to be the first call founders make when they’re seeking advice."
The third element is that Cerca represents not just itself but also a network that brings together most leading Israeli serial entrepreneurs. Each investment it makes provides access to one or two members of this group, whether for business development, potential customer connections, or just advice. "With every check we write, many entrepreneurs come on board," says Barath. "We know how to leverage them to the company’s benefit -whether as advisors or for their skills. It’s a kind of circle where everyone helps everyone else, and that’s why they invest with us."
This approach has turned Cerca into a main crossroads, a clique that is a sort of financial and ideological meeting place for serial entrepreneurs as well as younger entrepreneurs who are starting out. They benefit from support by veterans who have already made one or two exits. Assaf Rappaport and his colleagues are invested, as are Fiverr CEO Micha Kaufman , Wix President Nir Zohar , Hibob CEO Ronni Zehavi , WalkMe co-founder Dan Adika , Armis CEO Yevgeny Dibrov , and a serial cyber entrepreneur, Slavik Markovich , one of the founders of Descope.
The entrepreneurs who invest also benefit. Although Cerca is a small venture capital fund of just $200 million, its returns are high. This has led investment institutions such as Harel and More Investment House to join its investor group. Cerca, which does not disclose official figures and declined Globes’ request for comment, has already returned $2.70 to investors from its first fund for every dollar invested, and on paper it’s worth four to five times the original investment. The second fund- through which it participated in Wiz’s first financing round - has so far returned $1.60 per dollar invested, but on paper it' worth eight to nine times the investment, a conservative estimate based on the company’s most recent $15 billion valuation in its last round of funding.
"Everyone, the service providers and the entrepreneurs, has a clear interest in the company's success, and are together in this journey - answering night-time phone calls, traveling abroad for meetings if necessary, making difficult decisions - and we meet in this place to create a partnership that goes beyond service provider fees," Katz explains.
"'Cerca' means 'close' in Spanish. We choose only the ones we feel close to"
Katz, 54, began his career as an accountant at Kesselman & Kesselman PWC. After seven years, he left to found NextStage, a firm that provides accounting services to start-ups. Twenty years ago, this sector was in its infancy, but as the high-tech industry grew, it became a small empire, which at its peak had as clients more than half of the venture capital-backed companies in Israel, including Wix, Fiverr, WalkMe, and Monday.
"One day I decided to do a kind of mental exercise for myself. I sat down with Excel and asked myself: What would have happened if I had invested in certain companies with a certain entrepreneurial profile," recalls Katz, who to date has served as acting CFO for 30 Israeli start-ups. "The result showed it was worthwhile raising a venture capital fund to invest in these companies."
Barath, 50, the fund’s co-founder, was a partner at the law firm of Eitan Mehulal Pappo Bar (formerly Eitan Pearl Latzer & Cohen Zedek) before that firm split. She then started her own firm called BFP & Co., where she worked with prominent companies such as WalkMe and HiBob. After the WalkMe IPO, she was invited to sit on the board of directors, and in recent years, as her commitments to Cerca grew, Barath decided to merge BFP with the law offices of Jonathan Raz ; the firm is now known as Legato.
Even a decade ago, when Cerca was just starting out. Barath and Katz were not complete unknowns. They had a reputation as the industry's unofficial lawyer and CFO, but didn't have any standing as investors, and, when trying to raise funds, were often turned down. "We were told, 'You don't have a chance to get in alongside the big names,'" Barath recalls. "Let a new fund invest alongside Sequoia and Lightspeed? They wouldn’t allow that to happen. To make our first investments, in Adallom and Fiverr, we had to bring in our own money, which we eventually rolled into the fund".
On the basis of the first million invested from personal capital, in companies that turned out to be success stories, the two raised Cerca's first fund, amounting to $12 million. "We decided to set up a small fund because our thesis was that we only invest in entrepreneurs we feel close to. 'Cerca' means 'close' in Spanish. Even at the beginning, we invested only alongside a fund that would lead the round. We recruited many private individuals who were also entrepreneurs, and I think most of them are still with us to this day."
"It was unheard of, something completely new," says Ronnie Zahavi, Cerca's third partner who joined after serving as head of Business Operations at Cyberstarts, and knew Barath and Katz from their joint investments in Wiz, Legit Security, and Noname. "It wasn't obvious for me to come from somewhere else, or to convince entrepreneurs that, in addition to the fees, we also get ownership of the company. It's not just a fund that makes seed round investments. The idea is to go and grow with the entrepreneurs from the earliest stages."
Cerca’s magic formula is slightly different from that of a typical fund. Its leading entrepreneurs are not just financial investors. Many of them are highly active deal-flow sources, meaning they bring promising companies to the fund through their personal networks. This relationship is reciprocal: over the years, the fund has become a kind of town square for serial entrepreneurs, who, in turn, attract other investors in the fund to join them in new ventures through the fund itself.
You could say that you’ve created a clique fund
Barath: "But it's a broad clique of dozens, and that's why it works. We also have generations of entrepreneurs, who’ve managed to found and sell a company or two, who are already bringing companies of first-time entrepreneurs, or very young entrepreneurs who’ve only recently sold their companies. They’re all invested with us."
"Wiz’s success thanks to star-power and customer focus"
What did you see in Wiz at the beginning?
Barath: "Wiz was a combination of founders who complement each other and were at the peak of their careers. Each of them was a huge star in his field, with many years of experience from Microsoft, and they brought exceptional teams with them. They were lucky enough to already have investors who knew and supported them. On top of that, it was a matter of market timing. Not that the market didn't exist before; they had competitors, even in Israel, but Wiz was obsessed with customers. They stressed from the outset what they wanted and needed, and they didn't come with the approach of bringing a product to market and then asking customers to adapt themselves."
One of the knock-on effects of the Wiz sale is the significant rise in value for cyber companies at all stages, sometimes having little to do with revenue. Are we in a bubble?
Barath: "We won't invest companies at high valuations if we don't believe they can be big. The thing is, naturally, when there is a market with a concentration of good companies, even the less well-known ones benefit from it. We've been talking about a cyber bubble for five years, and the value is constantly rising, and the truth is that as long as there are buyers and there is a market with growing needs, the companies benefit from it. The big question is, how many winners will there be in each category and where are you invested?"
In July 2024, Wiz was in intense negotiations with Google for a $23 billion acquisition, which was leaked to the press and halted shortly thereafter. Rappaport stated, "The company is positioning itself for an eventual IPO," which sparked criticism, as Wiz - at the time one of the fastest growing companies in Israeli high-tech - was operating without a permanent CFO, and relying on a financial manager with no experience in the US capital market. It now turns out that behind the scenes, the company was being advised by Ofer Katz and financial consulting firm Nextage, which served as a kind of "CFO as a Service" until the appointment of veteran financial manager Fazal Merchant , a few months before the announcement of its acquisition by Google.
Don't you find it strange that a company like Wiz, with an annual revenue rate of half a billion dollars at the time and plans to go public, was running without a CFO?
Katz: "You can put together a long list of companies, such as Wix, SolarEdge and Monday, that hired an executive-level CFO only in the later stages, and there are others who did it only because of the pre-IPO roadshow. It's even funny, because anyone familiar with Wiz knows that the company experienced tremendous growth in the number of employees, in business, customers, collections, while managing many sites and secondary rounds; the model of an external CFO as a service provider worked well. Assaf could have brought in a CFO from day one, it was just a matter of decision and focus. Adallom didn’t have a CFO and Wiz only got one later.
"I can prove that an external CFO who has been at every juncture, with experience in fundraising, mergers and acquisitions, information systems, assets liquidation, and experience in the international arena, knows how to build a super-healthy company for an IPO, much better than someone inside who has never done it before. So, the model works well."
The fact that investors are willing to pay a premium for cyber companies has created a situation in which many startups in the field prefer to stay privately-held, secure exceptionally high valuations, and avoid going public - although the capital market has reopened. Even CyberArk, for example, is preparing to delist from the stock exchange.
Katz: "I don't think there's a reluctance on the part of cyber companies to go public, but when there's a good opportunity to raise funds privately, it's hard to say no. For the Israeli industry, this is not necessarily a bad thing. In the end, it’s more important to realize the company's dream, develop a technology that will be significant and will be used by many customers, and to share that success with employees. And sometimes, it’s easier to operate a large development center from here, as a private company, than if you were to go public. Being a private company is not necessarily the mark of Cain, and an IPO isn’t necessarily a prize. It's just another method of funding."
Published by Globes, Israel business news - en.globes.co.il - on November 4, 2025.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2025.