Technorati tags: rating, blogs, techcrunch, lgilab

Technorati Tags: StyleShake, DIY, Businessweek, O'Reilly, lgilab

TheCoils has a good post (in hebrew) that gives an overview on what happened in Israel regarding internet seed investments. 2007 was a very active year. Way more than 2006. I expect 2008 to be also an active one but many of those early investment will have to prove (including for our own portfolio companies) that a sustainable model is in place.

The interesting part of 2007 was that different models of investment were established in Israel and as TheCoils say, there is no Israeli VC that has not (tried to) put in place a special seed program to address correctly the internet companies.

If you can't read Hebrew there is a great table recapitulating the investment operations made over 2007 (click above to enlarge). The Internet Lab proves out to be one of the most active internet seed programs there. We are working very hard to make it also efficient and 2008 will be important for us in that respect.

Another trend i notices is that appetite from foreign investors (with no representation in Israel) for israeli startups: Mayfield, Spark, Mangrove (Zlio), Accel but also power angels Peter Thiel. And probably soon more (i heard about a deal or two coming up)

An important thing to spot is that many startups did not receive funding and probably won't. This is not necessarily a bad news: you do not always need VC money to succeed and you can build a very nice company without that (for example with angel money only). You can find some of those startups here

Finally 2007 was quiet in terms of M&A activity in Israel: all the attention was of course on Quigo (disclosure we invested in the new company of the founder of Quigo, Outbrain) that sold to AOL for 300+ m USD. Yedda was also acquired by AOL.

TheCoils should probably add also dPolls that was acquired by Toluna. 

2008 will reserve many opportunities for M&A as many startups will hit some nice milestones and some won't be able to pursue but still offer some nice assets to be acquired. The question will remain: Are we able to build giant internet players in Israel? I am not sure we will have the answer in 2008. Actually i think we won't. We'll need more patience for that.

2007 was a good year for the Israeli internet ecosystem and i think we are on a good learning curve. I am a bit concerned by the lack of developers and good wed design guys. But i am sure this will change soon. Really look forward for 2008

We are announcing today a new investment in French startup Bahu.com promoting a European social network for young students across Europe (special south and eastern)focusing on promoting talents.

Bahu is a French startup created by two students and backed by Oleg Tscheltzoff a serial and successful internet entrepreneur i have known for some time now.

We know, the space is not virgin but we were impressed with Bahu achievements only a few months after they launched (already 2 million unique visitors and present in more than 6 countries in 4 months).

Investing in non Israeli related startup is not the first purpose of the Lab, but this was an opportunity that was not easy to ignore. We are committed to support israeli entrepreneurship. We already financed 5 israeli related projects and hopefully more soon.

I am happy to serve on the board of Bahu and face some very tough challenges that we have in front of us.

Btw why "Bahu"? In cool young slang french it means "High School"

We recommend you this read from VentureBeat "When seed funding is better than Series A".

We could have written exactly the same this since this is precisely why we created the internet lab. A few quotes here

...So why do entrepreneurs think they need so much money right out of the gate? Some seem to be attempting to finance their way to profitability, but more often than not they think they need to ask for several million to get the attention of VCs. It’s become a bit of an urban legend: VCs won’t take an entrepreneur seriously if they ask for less than $5 million. That tall tale belongs in the archives with the one about how alligators live in the sewer system...

...By securing only as much capital as they initially need in a form of a seed round, entrepreneurs do themselves a big favor. First, assuming they take the seed funding as a bridge round which will convert into an eventual A round, they suffer no dilution. Second, they ensure themselves a much better valuation when they do eventually secure an A round because they have reduced one or more key risks during the seed period. Third, with this small amount of money, the entrepreneurs can get more insight and information on whether their idea is worth investing their own valuable time in before they have to make the multi-year commitment that comes with larger investments.

Vestopia, one of our portfolio companies still in private beta is getting some good PR lately. Below a video by Reuters where they are mentioned in the new generation of financial services

 

 

We are happy to announce our fifth LGiLab investment in StyleShake today.

For now we can't say much about the company but StyleShake is best described as an e-commerce bespoke fashion brand that operates in the UK and Israel. Apart from garment design the service has strong community identity.

The project is lead by Iris Ben David, CEO & founder who worked with top international clients on varied award winning Internet projects. She has over 10 year of international experience in various fields of new media and online advertising.

The team is also composed of

• Romina Karamanea – Creative Director, award winning bright fashion designer, who was recently selected as one of the 100 most promising worldwide fashion designers. Her work has been covered on many prestigious magazines and her recent collection has been shown on London and Milan fashion weeks.
• David Yanovsky – CTO, Chief software architect and Innovator. Formally founder and CTO of Jetro Platform. Before that, he was the CTO of RunOnWEb, San Diego. David Brings to StyleShake 15 years of comprehensive software industry experience.

The company is in stealth mode but will be soon offering a great innovative service. The idea is quite powerful and we look forward to see how it is going to be adopted by consumers.

In addition to StyleShake, LGilab has invested in Bp Tech Interactive Technologies, Vestopia, OutBrain and TimelessCities

More things are on the way. Stay tuned.

VesTopia, one of our portfolio companies (named until now Increditrade) , just launched their private beta, and we are very excited about it.

We have said much so far about it, on purpose. Their service actually lets you follow, in real-time, the real transactions and holdings within the personal portfolios of professional investors. All is done in a completely transparent mode, and while you get the pure transactions, you can also read about the strategies and opinions in the Investment Directors' blogs, and get alerts in RSS, SMS, email etc.

In the screenshot below you can see the real profile of one of the Investment Directors, Mike Gooson. You can see more pics and previews here

VesTopia are currently in a private, invitation mode only, but they still have some beta invitations left. So if you're interested, Click here or use invitation code LGI1ST in registration page

Many more exciting features are in the pipeline so stay tuned for the public beta and for great announcement VERY soon!

Today we are announcing two new investments with the Internet Lab of LightSpeed and Gemini. Number 3 and Number 4.

The news just broke on TheMarker by Raphael Fogel (website and newspaper).

Unfortunately there are some imprecisions i will try to highlight here. Both investments are not by Gemini as the Title mention but by The LightSpeed Gemini Internet Lab.

OutBrain

We made an investment in OutBrain (the URL in TheMarker article is not working at the moment and there is a typo on the printed magazine..) a service to deliver personnal content recommandation with a secret but really innovative business model. Yaron Galai is the founder of OutBrain (with Ori Lahav from Shopping.com) and Yaron is probably one of the savviest Israel internet entrepreneurs. He co-founded Quigo, a very successful challenger to Google Adsense in the USA. Since i am a heavy blogger, i hooked with Outbrain idea and business model right away, just like my partners. The very young company has already a web service composed  that will evolve very soon.

I’d like to precise that the information in TheMarker regarding the amount invested jointly with other investors in OutBrain is not correct (“about a million dollar”).

OutBrain provides a rating system you can use directly in Bloglines and Google reader from Firefox and let you embed on your blog you best rated blog content (look on the right of this blog for the widget). But this will be more powerful than that and the secret-for-now business model is really smart. You can also read their blog

Timeless Cities

We also made an investment in Timeless Cities which will provide a 3D immersive world coupled with original social networks features where we invested 1 million dollars. Yes i know it sounds like Second Life, but the concept is very different and very focused to a simple adoptable idea. The project is the brainchild of israeli artist Doron Nesher and has Michael Weissman co-author of the best selling book The Paradox of Excellence as CEO. The company based in Silicon Valley, is still in heavy stealth mode and hopefully we ll be able to tell more very soon.

Our PR is available here for download

The interesting part is that both those projects are located in the US. The Internet Lab is also committed to invest in internet projects lead by Israelis abroad.

A lot has been going in the lab since we started. Our current portfolio companies, Bp Intech and Increditrade are making great progress and will be able to offer soon the service we all expect.

We have met many companies during the past months, and we will have more announcements very soon.

PS: the news is already on some blogs and alarm clock has already caught the news (thanks Jon, you are fast!). Update: it just got also in Mashable

Update 2: the news just made it in TechMeme, between TechCrunch and NYTimes

Since we receive the question/comment every other meeting, i thought it was important to precise that LGiLAb is not an incubator (“Hamama” as we say in hebrew)

So let me precise what i mean by that: LGiLab is a joint venture of two funds dedicated to invest in israeli internet startup at very early stage. So far nearly no difference with an incubator and maybe the “lab” expression combined with “very early stage” can bring some confusion.

We are providing initial cash (up to a million dollars) to entrepreneurs to start off quickly their business and prove there is a good market feedback before taking an option on investing further. We are not hosting companies, or providing vertical services such as HR, marketing, finance, legal, which is what an incubator also does.

However we are trying to work with our portfolio companies and help them in specific issues

• recruiting some key employees
• review regularly their activity
• access to specific internet companies
• open doors here and there by leveraging our network

But this is not done on a full time basis and certainly not a by a team dedicated to it (i am the only full time personn on the internet lab).

We are very close to the way angels work with their companies, bearing in mind we are looking a step further and try to help our company grow enough to get to an A round.

If you are an entrepreneur what you should know is that the Internet Lab has a format of investment that can help you get quickly some money so you can run your company as fast as possible to a milestone of success.

Look forward to questions/comments if any

 

Tags: saulkein, indexventures

Today we announced an investment of LgiLab in Increditrade. This is our second investment since the creation of the Lightspeed Gemini Internet Lab (first was BP inTech). (Ofer Hi-Tech where the idea was born took also a minor stake). Increditrade will provide a range of services for simple retail investors that seek simple solutions and powerful information to make effective investment decision on financial markets

IncrediTrade empowers retail investors to make better investment decisions by leveraging reliable information in a simple and transparent format, which until now has been available to professional investors only.

The opportunity is great. The idea (we cannot disclose right now) is purely outstanding. The team (picture below of founders Assif Stoffman and Guy Hirsch CEO) is strong and brings heavy expertise both in investment fields and in internet marketing (Eran is part of the team).

We cannot say much right now since the company is in stealth mode and service will be released later this year. But i can tell you it is going to change the way investments are made. The challenge is big though. Making it in the financial world requires a lot of sharp efforts. We will work hard at LgiLab to make sure Increditrade gets the best support.

At this moment all you can do is register to their temporary homepage to get an alert when the service is released. 

I will join the advisory board of Increditrade along with Dan Ciporin .

• You can download our press release here
• More on themarker (hebrew) and thecoils (hebrew)