The FinTLV venture capital fund has raised its second fund – FinTLV II. The new 120 million dollar fund will be focusing mainly on growth companies around the world in the insurtech and fintech sectors. FinTLV invested some 200 million dollars in the past year.
Investors in the fund include Clal Insurance and Finance, Psagot and Hapoalim Capital Markets as anchor investors, Ayalon, Japanese insurance giant MS&AD and additional insurance companies from around the world, including FWD from Hong Kong, LB from Denmark and Reale Mutua from Italy. Additional investors: BDO Israel, Metrix as a technological partner as well as institutional investors from Israel and overseas.
Fund founding partner Gil Arazi said that following the success of the first fund in investing in three of the world’s four leading insurtech companies (Hippo Insurance, Next Insurance and Unqork), the new fund will continue in investing in the most promising companies in the sector.
“The insurance industry is a huge industry which is undergoing a process of radical change. The revenues of the insurance companies in America are five times those of the banks. Despite this, the insurance companies are mainly using outdated technologies. The successful insurtech companies will lead the change”, Erez said. According to him, “The fundamental understanding of the world of insurance, together with the relationships with insurance and reinsurance companies around the world gives the fund access to the most attractive investments in the sector”.
Fund managing partner Avishai Zilbershatz, added: “In order for an insurtech company to be able to succeed, it needs not only excellent technology, but also the ability to cope with high regulatory barriers, the ability to meet high capital adequacy requirements, the building of trust and relations with reinsurers and other players in the field of insurance, the development of capabilities in risk quantification, advanced financial management, the execution of mergers and acquisitions and so on. A company that succeeds in building these capabilities, builds itself a sustainable competitive advantage. The insurtech market is currently hot and for good reason. Many of the outstanding companies in the sector will become unicorns valued at over a billion dollars but in order to succeed in investments in this area, you need the ability to identify the companies that are capable of succeeding over time”.
Over the past year, FinTLV has carried out, amongst other things, a number of significant investments in leading insurtech companies around the world. The fund led a 150 million dollar round for Hippo Insurance on a valuation of 1.5 billion dollars, with the fund itself investing 50 million dollars.
Another investment was in Next Insurance, with the fund investing 50 million dollars within the framework of a 250 million dollar offering at a valuation of 2.5 billion dollars alongside the Google growth fund. The fund also invested in the American Unqork company, which recently completed an offering of 200 million dollars at a valuation of two billion dollars alongside the Blackrock private equity fund.
Arazi and Zilbershatz added that the raising of the new fund was fast, with the institutional investors identifying the growth potential of the companies in the sector and appreciating the capabilities of the find managers in identifying promising investment opportunities. The managers decided to limit the scope of the offering in order to allow for a higher yield for the fund investors.
In addition to Arazi and Zilbershatz, the fund managers include Gilbert Ohanna, former Chief Scientist of the IDF 8200 intelligence unit, and Mark Ches.