Six years ago, Vanessa Bartram helped start Zora Ventures to invest in early-stage Israeli tech startups, with an ambition that some of the companies would become billion-dollar companies and solve some of the world’s biggest challenges.
Since then, Zora has invested about $800,000 in five companies, is looking to ramp up its pace of investments and bet on teams “who are driven to improve the health and wellbeing of our planet.”
Now they are looking to invest a new $10 million fund in 12 such companies, which will be Zora’s first formal fund. Four million of this amount has been raised already with the first close expected in the summer.
Zora, which invests in pre-seed, seed or Series A rounds, has identified some 700 local companies of interest at the appropriate investment stage.
Israel’s next big successes “will be impact companies working on food security, health, climate change and all these good things,” she says in an interview with Karma.
Investors include family offices, foundations in North America, Europe as well as Israel, in addition to private individuals.
‘The Most Exciting Place In the Whole World’
Bartram took a circuitous route from Harvard and Princeton to Zora’s office on Rothschild Boulevard in Tel Aviv, ground zero for Israel’s start-up nation tech scene.
She began her career as an investment banker in Mexico City before founding WorkSquare, a recruiting and staffing firm providing a path to financial stability for low-wage workers in Miami. Then she planned to head to Port-au-Prince in Haiti to work in development and investment.
Instead, through a Heritage Fellowship with the Wexner Foundation, she discovered the start-up ecosystem in Israel and decided to become an impact investor through Zora, which she founded six years ago with associate Brian Steinberg.
“If I want to be investing in early-stage technology companies that have significant social and environmental impact, this is the most exciting place in the whole world, so I moved here,” says Bartram, who also co-founded Lavan, a network of investors that aims to educate the next generation of Jewish leadership, build local communities of impact investors, and encourage dialogue within the Jewish community about financial decisions and Jewish values.
Of the country’s 6,200 active startups, about 40% are in sectors like health, water, agritech and foodtech that traditionally are involved in impact, according to Start-Up Nation Central, a non-profit that tracks Israel’s tech ecosystem. Zora is one of Israel’s 12 private investment funds and four accelerators dedicated solely to impact companies, according to a March 2019 report on Impact Investing in Israel published by Our Crowd and Social Finance Israel.
“Entrepreneurs here are disproportionately inclined to be working on these major global problems to solve,” Bartram says.
The primary source of investment and assistance to such start-ups in Israel, as elsewhere, comes from a combination of private wealth and government-backed bodies, says Dalia Black of DB Impact Consulting in Tel Aviv.
“It is the foundations in the U.K., U.S. and today in Israel, and private wealth holders, that were the ones to step up and start to make a change, and they are the ones that built the ecosystem,” Black told the Israel Impact Summit in May.
Zora’s investments to date include Eye Control, which allows completely paralyzed patients to communicate using only eye movements, to MobileODT, which gives clinicians in developing countries access to diagnostic tests for women to promote women’s health in regions with limited access to care.
One early investment was in PlanetWatchers, which uses advanced radar data from satellites to monitor soil moisture, tree growth and the amount of carbon absorbed by vegetation in large forests. A demonstration project for a potential forestry company client in Brazil analyzed a forest of about 200,000 acres, roughly the size of New York City, and discovered about 10,000 acres where nothing was growing, costing the company about $20 million a year, says Roi Shiloh of PlanetWatchers. Annual monitoring of the entire forest would cost about $200,000 for the entire area, he says.
“The company had no idea. They thought it was their most productive area,” says Bartram. “It turned out there was a tiny weed that was interfering with all the saplings and there was nothing growing in the entire area.”
Just The Beginning
The firm has so far notched one exit — the sale of educational coding startup CodeMonkey to China’s TAL Education Group for $20 million, according to media reports, giving Zora a 2x return on its $180,000 investment alongside strategic partners in Japan and China.
Programs developed by the company, which teaches coding to kids through online games, proved popular with students from underprivileged backgrounds and in Israel’s geographical periphery when deployed by the country’s ministry of education, Bartram says. It was also succeeding in business abroad, with sales in Brazil and Scandinavia, she adds.
The new fund’s first investment will be in Wasteless, which uses machine learning to track perishable goods in grocery stores and deliver dynamic pricing solutions that enable stores to alter prices to encourage the purchase of produce closer to its sell-by date. Wasteless aims to help grocers cut food waste and boost their revenue to help reduce food waste in stores and increase revenue for shopkeepers.
“Supermarkets are throwing away about 30% of their perishable products – across dairy, bakery, meat, fruit and vegetables,” Bartram says. “By creating a dynamic pricing engine and updating prices in the store a few times a day, they could eventually help eliminate food waste from supermarkets.”
By achieving venture-competitive returns, Zora hopes to draw growing amounts of mainstream investment capital to impact companies and assemble a portfolio “capable of becoming billion-dollar companies while tackling some of our planet’s most difficult challenges in hunger, health and environment.”
With one successful exit to date and hundreds of interesting local impact startups to consider for its new fund, for Zora this is just the beginning.
“We believe that Israel is the most exciting ecosystem for impact tech globally, and that it will become the number one place to source impact VC deal flow within the next five to ten years,” she says.
Matthew Kalman reports on Middle East tech, business and the environment from Jerusalem.