UOB crowdfunding partner OurCrowd hits US$1b in fundraising in six years

[JERUSALEM] OurCrowd, an Israel-based equity crowdfunding platform that counts Singapore's UOB as its equity partner, has raised a total of US$1 billion for 170 companies and 18 funds in six years, it said at its investor summit in Jerusalem on Thursday.

Of those portfolio companies, 29 of them have achieved exits. It had 11 of its companies in its portfolio achieve exit in 2018, with companies including Samsung, Uber, Nike and IBM acquiring these portfolio firms.

OurCrowd has also made 13 write-offs on investments. On a blended basis, the portfolio has delivered two times on capital, said Jon Medved, founder and CEO of OurCrowd, at a press conference at the 2019 OurCrowd Global Investor Summit.

OurCrowd is a global investment platform that connects startups to funds from accredited investors worldwide. Mr Medved said more institutional investors are coming on the platform, and by next year, institutional investors will likely make up a larger part of the investment base than that made up by accredited investors. Still, Mr Medved said the platform remains keen on having accredited investors get access to this asset class of unlisted startups seeking funding.

"It's about the individual investors that have been frozen out of this asset class," he told reporters, pointing out that 99 per cent of accredited investors in the US - that is households that have US$1 million in investable assets beyond the value of their primary residence - had never done venture capital.

"That was the problem we went out to solve: bring them in."

UOB has partnered OurCrowd since 2016 to provide equity crowdfunding services in Asia, through which SMEs (small and medium-sized enterprises) and startups can seek investments from accredited investors in return for shares. Under the partnership, UOB can refer companies from its tech incubator and accelerator programmes to OurCrowd to be considered for fundraising, with the OurCrowd team deciding on its portfolio companies.

UOB has invested more than US$10 million in OurCrowd for an undisclosed equity stake.

The OurCrowd network consists of 30,000 registered investors from over 150 countries. Geographically, the company's primary investor base remains the United States, followed by Asia. The average number of investments made by individuals was seven, with an average portfolio size of over US$350,000. The minimum investment size on the OurCrowd platform is US$10,000. The minimum investment in an OurCrowd fund is US$50,000.

OurCrowd has invested in 24 new companies in 2018, including Beyond Meat, which makes a plant-based meat substitute; skyTran, which is developing a new form of urban travel; and ThetaRay, an AI-based (artificial intelligence-based) detection and protection against financial fraud.

Mr Medved said that Israel and China today are neck-and-neck in building out artificial technologies, which remains the top technology trend. "If you want to get venture capital, mention AI. In fact, if you don't have AI as part of your pitch, you're sort of in trouble," he said.

But where Israel stands out is in having AI used in sectors such as medtech (medical technology) and agtech (agriculture technology), and where it can develop a robust ecosystem with "the sheer explosion of entrepreneurial talent".

"The synergy we've created between investors, companies and venture funds has allowed us to play an instrumental role in building Israel's reputation as a global leader in innovation and technology."

OurCrowd also launched on Thursday an impact fund that develops social finance, and a medtech fund that looks at innovative medical technologies and therapeutics.

The 2019 OurCrowd Global Investor Summit in Jerusalem is the largest technology showcase in Israel with over 170 startups and more than 17,000 registered attendees.