Meirav Har Noy and Adoram Gaash, founders and Managing Partners of MonetaVC Funds, currently manage about $ 150 million. What will make them invest in a company, what will drive them away from investing and why does an entrepreneur from their portfolio inspire them?
There are currently 202 venture capital funds operating in Israel (132 Israeli funds and 70 foreign funds). Each focuses on different startup’s stage and different areas, each believes in its own investment strategy. As part of the “Unicorn” section, we bring you one venture capital fund each month and the story behind it – the way it selects startups for investment, the successes and failures, the warning lights and the characters that inspire its founders.
And this time:
Year of establishment: Moneta VC first fund was established in 2015 as a fund specializing in the field of fintech. The choice of name symbolizes the connection to the field of finance – Juno Moneta was the mythological goddess of treasure.
Founders: Adoram Gaash and Meirav Har Noy
Fund size: The group manages $150 million in three funds: Moneta-Seeds-I, a $20 million early-stage Fintech fund; Moneta Capital, a $80 million revenue-stage Fintech fund which operates in parallel with the Seed Fund; And the newly founded, Moneta Seeds 2, which manages $50 millions and continues the activities of the first Seed Fund by building and seeding Fintech companies from the earliest stages.
Fund managers: Adoram Gaash, Meirav Har Noy
Stages of investment: All stages, early/seed to growth. The structure of the Seed Fund, which operates in parallel with the Growth Fund, makes it possible to support projects from the concept stage to the IPO.
Leading areas of investment:Moneta specializes in the fields of fintech and insuretech, and its investments are made exclusively in these areas.
Founders and Managers of Moneta: Meirav Har Noy and Adoram Gaash. Photo: Weintraub Foundation
Who are the notable portfolio companies today?
In the six years of its existence, the funds have invested in over 20 companies. Its portfolio companies include
- Rewire,which recently announced a major fund raising and set up a neo-bank for immigrants operating in Europe, Asia and Africa;
- TipRanks, which built an investment analysis technology based on Big Data and embedded its products in some of the world’s largest financial institutions;
- Railsbank,the global category-leader in the field of Banking As A Service (BaaS), with headquarters in UK, US, and Asia;
- Insurufy,an Insuretech company which leads the revolution in digital distribution of P&C insurance in the USA.
- Sproutt an Insuretech company operating a US-based digital MGA for life insurance;
- Panorays, a Fin-Security global company operating a global Third-Party Risk service
And there are 16 more…
How many exits did you record?
The fund strives to grow large and significant companies. Naturally the development of world-class companies requires time to mature. We have been operating for 6 years and estimate that in the coming year we will announce our first exits.
What is your investment strategy?
Adoram Gaash: “The investment strategy of the Moneta funds is divided into several parameters: First, we invest across all stages – from early stage to growth and mezzanine – and for this very reason at any given time we have two active funds operating in parallel (seed and growth). A second parameter is our specialization in finance. We have developed a world-class knowledge grid and ecosystems in Fintech and Insuretech, and as a result we enjoy a significant deal flow in Israel and in other major markets (i.e. UK, USA).”
Meirav Har Noy: “The other part of the strategy is related to our close relationships with strategic partners: Many of the Moneta funds investors are global financial institutions (banks, wealth managers, insurance carriers) and the fund leverages these relationships to validate the product-market-fit of investee startups. The advantages for a young startup that is connected to a global Bank from its first days are enormous – the dynamics of having a design partner can focus the startup and avoid the development of a solution that does not cater to a real market need.”
What will make you invest in the company?
Gaash: “In our most successful companies, there is a combination of top-notch founders who are also domain experts in the field of the company. When you have these blend of skills, the company has a greater chance of developing an excellent product that caters to a real need. In many cases our best founders have had validation of the startup’s idea from a number of customers who have expressed an interest in the product, and that’s the whole secret – great entrepreneurs who do not gamble – but put their ideas to the test – just as the VC funds will test their idea. In these thorough entrepreneurs we are happy to invest”
What impact do you think the Covid-19 crisis will have on the industry in general and in your domain in particular?
Har Noy: “Covid created a shock-wave at a global level which has impacted human behaviour in many aspects of life. If we had to choose one word to describe this change, it would be ‘digitization’. Schools have gone digital; the office has gone virtual and even the Passover ‘Seder’ nighthas gone to Zoom. In terms of the high-tech industry, and fintech in particular, digitization has accelerated in all fronts. Companies operating in the financial services domain, especially B2C SaaS ones, have been able to leverage the changes in human behaviour during this period and the Corona has become an advantage for many of them. “
What are the warning lights that will make you not invest?
Har Noy: “The warning lights for us are almost always related to entrepreneurs who are not experts in their startups’ field, or those who have not sufficiently tested the product idea with real customers and partners. Other “turn-off” signs include entrepreneurs who do not master their business plan’ numbers and those who attach too much importance to the product and less to the competition or the market. Those cases usually turn on warning lights for us.”
What tip can you give to entrepreneurs looking for an investment?
Gaash: “Set up a company in a field that you master and have an unfair advantage in. If you do not come from the field, then before starting the start-up make sure to invest time and study it perfectly until you become a domain expert. Add more co-founders to complement missing knowledge areas–building a winning team is always worth the effort and the equity sharing.”
Meirav: “When you meet VCs, you must be perceived as the sharpest in the field. Keep in mind that investors understand the field, and they might have already met with five start-ups similar to yours, in recent months. Also, demonstrate your full knowledge of the plan and numbers – leave the impression that you understand how to run a business, for all the meanings and aspects of the thing.”
How are you different from other funds?
Adoram: Moneta’s uniqueness consists of these three elements:
- Fintech pure-play: We are operating a specialized fund, and not a general IT innovation VC. Our focus allows us to help fintech start-ups become successful much more effectively.
- We are working closely with global strategic partners who are banks, insurance firms and wealth managers which gives us deep understanding of the startups ideas on one hand, and allows us to add huge value once we have invested, on the other hand.
- Cross stage: we support our ventures across all the stages – from seed to growth. For that we are operating two funds in parallel one that specializes in seed, and one that specializes in revenue stage expansion rounds.
In retrospect, which company would you like to invest in and missed out on?
Meirav: “In our opinion, Hippo is an excellent company in which we would have been happy to have invested in. Assaf Wand is an amazing entrepreneur who worked very hard on the foundation of Hippo, built the go to market and managed to build his company on a global scale, which changes the face of the industry.”
Which figure in the industry (local or global) inspires you?
Har Noy and Gaash: Nigel Verdon, CEO of Railsbank, our portfolio company, is an inspiring figure: In the 2000s, in the face of the breakthrough of cloud service companies, he founded ‘Currency Cloud’, which revolutionized the world of international CC transactions, by proposing foreign currency settlement exchange rates in minutes instead of 2 days which was the practice before. A decade later he was one of the first in the world to understand that financial service would become a feature or capability of a platform, rather than a business in itself. He founded Railsbank and made this vision a reality: the company enables non-banking companies to also provide financial services to their customers. Railsbank has turned insurance companies, store chains and marketplaces into providers of credit cards, loans, international transfers, savings accounts, and more. Verdon inspires us because he is the man who implements the famous fintech vision: ‘Banking services are necessary, Banks are not’.
Who opened the door to your field, or how did you get into your role?
Har Noy: “I started my career at Intel Capital as an analyst immediately after graduating in economics. After that, I worked at Apax Partners and Tamers Capital as part of the investment team. “
Gaash: “I studied at the Technion, served in the famous 8200 unit, founded startups out of which, a few became very successful exits, and also founded and managed StageOneVC (sponsored by the Israeli telco – Bezeq) for a decade. In 2013, I met with Meirav, and we explored the possibility of establishing a VC fund that specialize in the data revolution. To finance ourselves during the foundation, we carried out a large consulting project in the field of fintech for the strategy division atf Bank Hapoalim. It is really therethat we fell in love with Fintech and decided to refocus our plans to data driven Fintech. In 2015, we launched the first MonetaFund: Moneta Seeds-I.”
What other fund does Paragon come to?
Gaash: “We work with all the funds, but if we need to mention one, then we really value the team at Viola-fintech, which operates like us in the fields of fintech and insure-tech. They focus on the slightly more advanced stages of companies, but there is a good dialogue between us, and we have even made two excellent investments together: ‘Rewire’ and ‘Insurify’