China’s Alibaba backs Israeli venture fund

According to The Wall Street Journal, Alibaba has agreed to contribute $15 million to JVP's seventh fund. The vehicle, which has an overall target of $180 million, reached a $160 million first close last year. Chinese LPs are understood to have contributed about 40% of the first close capital, with Qihoo360 participating alongside fund-of-funds Shengjing.

Established in 1993, JVP has more than $900 million in assets under management. It has exited 25 portfolio companies through a combination of IPOs, trade sales and mergers, including NASDAQ-listed Netro Corp. and Chromatis Networks, which was sold to Lucent in 2000 for $4.8 billion.

Speaking to AVCJ earlier this month, Kobi Rozengarten, a general partner at JVP, said the firm was keen to develop long-term partnerships with Chinese enterprises and financial investors. "We're seeing more Chinese large companies backing Israeli fund managers, making co-investments or targeting direct investments through M&A. Few Chinese players have actually acquired companies in Israel, but we will see more of this," he said.

In 2014, 12 Israeli venture capital funds raised $914 million between them, representing a six-year high, according to the Israel Venture Capital (IVC) research center and KPMG. Chinese investors feature prominently. In addition to JVP, Carmel Ventures raise $194 million for its fourth fund, with 25% of the corpus coming from Baidu, Qihoo360 and Ping An Insurance.

Alibaba's debut direct investment in Israel was in Tel Aviv-based Visualead, which creates Quick Response (QR) codes technology.

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