“Rothschild said that the time to invest is ‘when there is blood in the streets.’ That is sad, but it’s true. A large portion of investors are somewhat paralyzed, creating opportunities for us. In such situations, you need courage and capital, and people rarely have both.”
With these words, Justin Borus, Founder and Chief Investment Officer of Ibex Investors, describes his decision to increase investment in Israel amidst the war. The fund recently completed raising $106 million for its fourth fund, intended for investments in early-stage Israeli startups. The third fund of $100 million was raised by Ibex in 2020.
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The Ibex Investors team in Israel with Justin Borus in the center.
(Photo: Roei Shur)
Ibex Investors is a U.S,-based investment firm that invests in Israeli startups from pre-seed to pre-IPO and typically leads or co-leads rounds across various verticals. The firm also invests in public Israeli companies through its hedge funds. The firm is headquartered in Denver, Colorado, with an office in Tel Aviv.
Since launching its first Israel fund in 2012, Ibex has made 40 early and growth stage investments in Israel. Among the current investments in Ibex’s portfolio are BeamUp, Appwrite, Honeycomb, Visionary.ai, and Weka. Previous Ibex portfolio companies have been acquired by leading firms such as Cisco, Check Point, LinkedIn, and Intuit.
The Ibex team in Israel is led by Nicole Priel, Partner, who focuses on early-stage investments, and Gal Gitter, Partner, who focuses on growth stage and secondary investments.
Borus founded the fund in 2012 in Denver after participating in a delegation of businessmen to Israel and being impressed by the local ecosystem, which he continues to believe in despite the difficult events. “I was in Israel a few weeks ago, and it is clear to me that it will emerge from the war better. It will export the innovations that will be created as a result of the war to the whole world, and that will be a game-changer. The best innovations unfortunately come from wars,” he says. “The U.S. entered the world war ‘with a horse and cart’ and came out of it with nuclear weapons.”
According to Borus, he was far more worried by the attempted judicial reforms in Israel than by the war in Gaza. “If you had asked me six months ago, I would not have been so bullish on Israel, and that was because of the legal reform. This is something that bothered me and foreign investors much more, because nobody likes to see an extreme government in action,” he explains.
Even the downgrading of Israel’s credit rating by the rating agency Moody’s does not diminish his optimism: “The U.S. credit rating forecast dropped in November, and since then the S&P 500 index has jumped by 15%. Investors do not give the credit rating the same attention as before. What is important for them now in the context of Israel is a permanent ceasefire. This could accelerate a new rally in the domestic market, so we are also becoming more aggressive here. We recruited two more people to the office in Tel Aviv, and in terms of investments, the current situation in Israel is the best in the 12 years I have been working here. Today it’s hard to see that, and we also felt that way after 9/11, but since then the markets in the U.S. have quadrupled.”
