ETF News

Israel's Viola FinTech to expand fund size, bring in new partners

TEL AVIV, March 11 (Reuters) - Viola FinTech, a new financial technology fund from Israel’s Viola investment group, expects to bring in new partners and increase the fund’s size to as much as $150 million in the next few months.

Half the money for the $100 million fund was provided by Canada’s Scotiabank, The Travelers Companies, BNP Paribas and another unnamed European bank.

Israel’s Bank Hapoalim, investment house Meitav Dash, Israel Discount Bank and Direct Insurance provided the rest.

The fund’s managers are in discussions with potential new strategic partners, who would bring new areas of expertise.

“We will expand the list of investors by two or three,” Daniel Tsiddon, a founder and general partner in the fund, told Reuters, adding that the company can “handle up to 12.”

Tsiddon said Viola FinTech is also very close to making its first investment in a company that uses machine learning and artificial intelligence to help small businesses.

The fund will invest in about 20 startups, with initial investments of $3-$5 million, although in some the amount could reach $10 million.

“If we want to invest more we can go to our strategic investors to co-invest,” said Tsiddon, the former deputy CEO of Bank Leumi, Israel’s second largest bank.

Viola is the first investment in Israel for Scotiabank, Canada’s third-largest bank by market value.

The bank is interested in Israeli technology in the areas of cybersecurity, fraud and compliance as well as artificial intelligence and machine language to improve automation, said Ignacio Deschamps, group head of international banking and digital transformation.

In addition to its investment in Viola, Scotiabank is working on proof of concept with several Israeli companies.

“Our reason to be here is to see if we can help them travel and use their technology to integrate with our services,” Deschamps said.

Israel’s Viola group has more than $2.8 billion in assets under management. (Reporting by Tova Cohen, editing by Louise Heavens)