OurCrowd launched a new fund to tap into the sectors seeing accelerated growth during the pandemic as well as the sectors covid-19 has shown to be underfunded.
The Jerusalem-based venture crowdfunding firm is targeting $100 million for its Pandemic Innovation Fund which launched at the beginning of June.
The fund will focus on three areas including prevention and containment, treatment and healing and continuity and disruption mitigation. Within these categories, companies could range from vaccine biotech and healthtech start-ups to edtech and cybersecurity companies.
Jon Medved, OurCrowd founder and CEO, said that due to how different this downturn has been compared to those in the past, they saw a “strong minority” of investors ready to get back into the market and capitalize on opportunities quickly.
“The combination of attractive pricing, new emphasis on medical investment and life sciences, and the appreciation that we are at an inflection point mandates an aggressive opportunistic approach,” Medved said. “This is the time to take advantage and invest not for the short-term but for the long-run.”
The fund will invest across stage and geography. Medved added that it’s a good time to invest in these areas as markets have adopted these tech categories quicker than ever and that the market has seen two years worth of adoption in just the past two months.
“These are trends that were started years ago that have just grown exponentially,” Medved said. “It’s a good time to make investments if you see companies today, in the midst of this pandemic, catching fire and gaining traction. That’s a really good signal-to-noise event.”
Medved said healthcare and healthtech are target areas because they are seeing the growth in those sectors, which have traditionally been underfunded, especially in Israel where they typically grab less than 20 percent of venture funding.
He added that the fund’s other focus on the “new normal” industries like cybersecurity and edtech are seeing increased activity due to the pandemic, but many of those areas are predicted to continue to grow long after the threat of covid-19 diminshes.
The fund will invest in a mix of follow-on rounds into existing portfolio companies in these categories as well as new opportunities. The firm has already planned multiple follow-on financings.
One of which is Tel Aviv-based Sight Diagnostics, which provides a home blood testing services. The start-up most recently raised a $27.8 million Series C round led by Longliv Ventures on Valentine’s Day last year. OurCrowd participated in that round alongside GO CAPTIAL and New Alliance Capital, among others.
This new vehicle falls into OurCrowd’s bread-and-butter strategy of crowdsourcing their funds and allowing retail and accredited investors to participate alongside institutional LPs. The minimum buy-ins are purposefully kept low at $1 million for institutional investors and $50,000 for accredited investors.
“There is a concept in the public market called a ‘public pandemic play’ and what stocks should you buy, and there needs to be a private pandemic play,” Medved said. “We are a platform that combines both institution investors, family offices, and high net-worth individuals. All three seem to be enthusiastic about it.”
“I potentially foresee this as pandemic fund number one. There could well be pandemic funds two, three and four.”
He added that the fact that they operate as a platform has allowed them to jump on this opportunity earlier than other firms as they usually have multiple funds raising and deploying capital simultaneously as opposed to having to stick to a strict investment cycle.
Medved said they anticipate a first close sometime over the next few weeks and are hoping to raise the fund within months as opposed to years.
“The technologies developed both on the health side and on the ‘new normal’ side will be important not just for the current timeframe,” Medved said. “I potentially foresee this as pandemic fund number one. There could well be pandemic funds two, three and four. This is an area that simply needs more investment.”