TEL AVIV, Dec 24 (Reuters) - A new investment fund co-managed by Intel Corp’s former chief product officer is aiming to raise $300 million to invest in Israeli tech companies with the goal of eventually listing them on the Nasdaq stock exchange.
Eucalyptus Growth Capital plans to raise an initial $100-$140 million in the first half of 2016 from investors in the United States, Europe and Asia.
“The real dilemma for the Israeli tech sector is that while being extremely successful and important for the Israeli economy it does not create large companies. The tendency is for most companies to sell themselves off,” David Perlmutter, managing partner at Eucalyptus, told Reuters.
Perlmutter was chief product officer at Intel from 2009 to 2013. His partners at Eucalyptus are Rami Hadar, former chief executive at Allot Communications, and Eldad Tamir, chief executive of the Tamir Fishman investment house.
Tamir said the fund was looking at six companies with sales of over $30 million and noted companies seeking an initial public offering (IPO) need about $100 million in sales. Creating bigger markets for their products requires substantial funds and start-ups initially use most of their money from sales for R&D.
“We want to be the place to go to when you want a big check. If you want $6-$10 million go to a venture capital fund,” Tamir said, noting that until now only a few private equity funds such as KKR have been making larger investments.
Entrepreneurs that have already sold a company are often interested in building bigger firms with their second or third start-up, Tamir said.
Sectors of interest include enterprise software, e-commerce, video and the internet of things, he added.
Eucalyptus’ advisory board includes former Intel Chief Executive Paul Otellini, former president of AMD Atiq Raza, and Mellanox CEO Eyal Waldman. (Editing by Mark Potter)