Israeli venture group Team8 raises $500 million for new tech funds

By Steven Scheer

JERUSALEM (Reuters) - Israeli venture group Team8 said on Tuesday it had raised $500 million to invest in cyber, data infrastructure, fintech digital health and artificial intelligence (AI) startups, and bringing total funds under management to well over $1 billion.

Over the past decade, Team8 has created 20 companies and invested in 21 others, typically investing $5-10 million in each startup. So far, it has achieved eight exits.

"This (new) capital will allow us to build and invest in another 30 companies or so," Yuval Shachar, Team8's managing partner, told Reuters. "Our model has proven out to be very attractive, definitely for second and third time entrepreneurs."

While Team8's roots are in the Israeli military's 8200 intelligence unit in cyber security, it has expanded its focus to add data infrastructure, financial technology, AI, and digital health.

The latest funds will go towards three new funds, with $235 million for its second venture capital fund. Another $110 million will be for its third venture creation enterprise fund, in which Team8 builds two companies a year.

It also created a new digital health fund of $70 million.

Shachar said during the fundraising process it already invested in two cyber firms, two more in digital health and several others from its venture capital fund, preferring not to wait and "wanting to keep the momentum going".

Team8's fundraising comes despite Israel's five-month-old war with Palestinian Islamist group Hamas in Gaza, which followed a tough tech environment in 2023 stemming from a global slowdown and Israeli government plans to overhaul its judiciary. The judicial plan has since been put on hold.

Shachar said despite being an Israeli company, investors look beyond the current military conflict.

"Investors look at a 10 year horizon, they don't look at a one-year horizon and when you look at a 10-year outlook for the Israeli tech ecosystem, it's probably better than ever," he said, citing Israel's prowess in the growing AI technologies.

"So, long term, investors believe there will be a lot of value generated here."

(Reporting by Steven Scheer; Editing by Mark Potter)