Venture capitalists could not sell their stake without asking questions about the portfolio company’s outlook before the portfolio company was sold or went public. As startups begin to remain private for longer, VCs and executives have become more comfortable selling some of their holdings to new investors, but many VCs right now would like to sell more over the past year.
One company happy to have pulled the trigger in two of its own deals is: YL VenturesNow a 14-year-old US-Israel venture specializing in early-stage cybersecurity investments, it closed its most recent largest fund with a $400 million capital commitment.
Just over a year ago, when the now five-year-old cybersecurity asset management startup Axonius raised $100 million worth $1.2 billion, the company’s first investor, YL Ventures, took a stake in ICONIQ Growth for $270 million. sold to , Alkeon Capital, DTCP and Harmony Partners.
The amount was three times the size of YL Ventures’ $75 million debut fund, which had a total of $15 million invested by YL Ventures in Axonius.
“A year ago, drainage was so high that under normal conditions I felt I needed: [more time] Yoav Leitersdorf, founder of YL Ventures, based in Mill Valley, California, said with a laugh, “We tried to achieve the same result. There was a lot of demand for Axonius stock in the current market, and looking back now … “
YL Ventures sold most of its stake in Orca Security, a four-year-old cloud security firm, to a new buyer when Orca extended its Series C round last fall. 50% in just 7 months up to $1.8 billion.
“We didn’t sell the entire position,” says Leitersdorf. But his company nevertheless stole a whopping $250 million from his deal.
In fact, 2021 was even better when another portfolio company from YL Ventures, Mediagate, a medical IoT security startup, was sold to industrial cybersecurity provider Claroty in December. $400M Series E Round SoftBank’s joint venture with Reitersdorf canceled the deal for $100 million.
A solid return for the company that currently manages $800 million in assets and has previously found a way out, including the 2017 sale of Hexadite to Microsoft of $100 million and the container security startup Twistlock that it sold to Palo Alto Networks in 2017. is. $410 million in 2019. (YL Ventures was Twistlock’s largest shareholder and invested too early to build a position by investing $12 million in the company as an independent company for four years.)
So what’s the secret sauce behind YL Ventures? From the beginning, we have been and continue to be investing as quickly as possible in very specific types of companies. As reported when we last covered the company a few years ago, almost every founder of the YL Ventures portfolio served not only in the Israeli Defense Forces, but especially within the 8200 unit, an elite part of the organization that became a training ground. It’s for the world’s biggest cybersecurity company.
The department is known to accept less than 1 in 100 high school graduates, so it’s no surprise that cybersecurity-focused startups try to cherry-pick them once their service is complete. YL Ventures seems particularly adept at making these efforts a success.
Leitersdorf boasted that YL Ventures had “the first deal on every seed deal coming out of Israel,” said Ofer Schreiber, senior partner and head of the company’s Israeli office, faced many challenges in the recruitment space. Mostly, Schreiber said, “The network is too deep there.”
He also said the company’s success to date has largely depended on the work of the company’s other senior partner, John Brennan. He oversees a large network of CIOs (120 of the Chief Information Security Officers). He takes an interest in return for reviewing the deal and sharing unresolved issues with his company.
The CISO is not a limited partner of the fund, but he said the CISO’s investors include very high net worth in the US, Europe and São Paulo, Brazil. A little crossover.
Leitersdorf also said that YL Ventures promoted two colleagues as part of this new fundraising process. Sharon Seemann, who also served in Unit 8200, was appointed as a partner. She oversees the company’s marketing performance. Leitersdorf focuses on business development, and Michael Cortese, “a member of the check-writing group” has also been nominated as a partner.
Leitersdorf, who remains the company’s sole general partner, said the collective plan for the team, meanwhile, is to continue working on specializing in Israeli cybersecurity startups of all kinds. .
Almost surprisingly, the idea is to fund 3 new startups per year, or all 10 startups.
And again, since YL Ventures was founded, we have invested in a total of 30 companies so far. Leitersdorf says that only one was “wisdom”.