VERITAS



		Veritas Fund II L.P. (VVP Fund II) is a venture capital fund managed by Veritas Venture Partners (Cayman) L.P. (Veritas), Israel’s oldest venture capital firm. VenFin is a limited partner of the fund, with a maximum exposure of US$1.5 million, which represents an interest of 4%. Veritas has drawn US$1.05 million of this commitment.

The investment broadens VenFin’s access to international deal flow and networks. It has given VenFin exposure to Israel and, to a lesser extent, the southeast USA region, where the Fund is primarily invested in seed-stage technology companies.

Overview of the year to 30 June 2007

By June 2007, VVP Fund II L.P. had made thirteen investments in the following sectors: enterprise software (3), communications (5), medical devices (2), homeland security (1), semiconductors (1) and logistics (1).

During the year under review, follow-on investments were made in ten of these companies, namely Asankya, Bamboo, CableMatrix, ClickFox, CytoDome, Escape, Fringland (fring), Guardium, Sirica, and WebLayers.

VenFin made a direct co-investment in fring, which provides a mobile communications service based on VoIP technology that allows mobile subscribers to communicate at zero or very low incremental costs per call by means of a software application installed on their existing cellular handsets.

The future

In Israel, approximately US$626 million was invested in 161 VC-backed start-ups in the first half of 2007. These numbers are slightly higher than those for the comparative period in 2006, with foreign VCs holding an investment market share of around 50%. Communications and networking-related investments continue to dominate with a 42% share, followed by software at 24%, life sciences at 16% and semiconductors at 8%. Seed and start-up companies represent about 18% of this amount.

The Fund is expected to make another one or two fresh investments in the coming months, which it will focus on making follow-on investments in its existing portfolio companies.