Viola Ventures was a pioneer in Israel’s startup ecosystem in 2000. Two decades later, the firm has evolved with the market and has its sights set on the future. 

The firm, based in Herzliya, formerly known as Carmel Ventures, celebrates its 20th anniversary in February. The firm has been a consistent leader in the Israeli VC market since its founding, raising more than $1 billion across five funds and working with more than 50 tech startups over the two decades. 

Shlomo Dovrat, a founder and general partner at Viola Ventures, had previously led multiple companies to IPO. By the late 1990s, prior to launching Viola, he says he realized that the industry was changing.  

Viola’s founders saw that Israeli companies were having trouble scaling the same way as their US counterparts. “I was frustrated because I saw Israeli tech companies building great products and Silicon Valley was building great businesses,” says Dovrat, who adds that there was a glass ceiling for Israeli companies and a limit of how large they could grow partially due to funding options. Viola looked to change that. 

“Before we started Viola, if you ever told me I would be a VC one day I would be deeply insulted,” Dovrat jokes. “For me this was the dark side, but it was a natural evolution.”  

Viola now typically invests between $2 million and $10 million in seed through Series B rounds.  

The firm invested in the $10 million Series A round of Lightricks, a computer graphics and image processing company, in 2015. The startup raised $135 million in a Series C in July that valued the company at $1 billion.  

In 2011, Viola was the first institutional investor into ironSource. The engagement and analytic tool developer received a $450 million investment from CVC Capital Partners in October.  

Evolving into growth, debt 

Viola achieved success, but it has continued to evolve. The firm created Viola Credit for venture debt lending later in 2000 and Viola Growth in 2008. “We tried to copy the most successful Silicon Valley strategies of going for large outcomes and large stories,” Dovrat says. 

The firm rebranded as Viola Group  and formally consolidated its teams in 2017, allowing better collaboration and organization. Dovrat credits some of this success to the firm’s ability to predict the market, its thematic investing approach and an entrepreneur-first mindset.  

“We are cognizant that the real heroes are not the venture guys, they are the entrepreneurs,” Dovrat says. “It’s very religious to our culture. We view ourselves almost like a service industry.” 

Dovrat adds that they are usually the most active board members and are always available to companies without being forceful –  “by pull and not by push.”  

Looking back, Dovrat says Viola didn’t get everything right the first time, but he’s OK with that. He says he wishes they had known they didn’t need to adopt a socialistic approach to capital deployment – dividing funding up evenly among companies – and that sometimes it’s beneficial to look past the business model.  

Succession plans 

Dovrat believes that the firm has built a strategy over the last 20 years that will last. A succession plan is in place that will keep Viola a household name in Israel long after his retirement, not that there are any upcoming plans.  

“We are now three generations working together,” Dovrat says. “We have a group of partners across all of the asset classes that are in their late 30s and early 40s. We are creating the longevity of the firm. It is very important for us.” 

Natalie Refuah joined Viola in 2008.

One such partner is Natalie Refuah, who joined the growth team at its inception. “We’ve always been leaders in the market because we created a huge brand name in Israel,” Refuah says. “No one in Israel will not recognize or know about Viola.” 

Refuah has an optimistic outlook for the firm she has helped grow over the last 11 years. “They know that we are always there, and we always have money to invest. We are not going anywhere,” Refuah says. “We are investing in Israeli companies. We are always on the market. We are always scouting for deals.” 

Refuah and Dovrat know that this dependability will continue because they predict Viola will be able to seamlessly expand its platform and strategies as the market continues to change.  

“Viola’s mission for the last 20 years has been to enable and support the growth of significant tech companies out of Israel. I think we still have a lot to do,” Dovrat says. “When I look back at the 20 years, I think it has been an amazing success for the industry and I believe that Viola had a leading role in it.”