Champel Capital Ltd. said Wednesday it led a $5 million Series A round of venture capital for Israel-based Intelligent Traffic Control (ITC) as the firm continues to deploy capital despite economic headwinds.
Intelligent Traffic Control specializes in computer vision and machine learning algorithms that help predict traffic patterns and prevent congestion, with Mobilitech Capital as co-lead investor in the deal with Champel Capital.
Amir Weitmann, managing partner at Champel Capital, said the firm is not pulling back from investments even as others move to conserve cash and spend less money at work in the face of a potential recession and inflation.
Weitmann said it was a mistake for investors to divert capital away from alternatives during a historic opportunity in some emerging industries such as agritech or fintech.
“Last year, investors poured money into junk companies at ridiculous valuations,” Weitmann told MarketWatch. “A year later, they eschew much less speculative investments to much less frothy valuations.”
Weitmann said he sees many good or great companies out there at more attractive prices.
“You have solid companies with good valuations and people can’t invest,” Weitmann said. “This has nothing to do with Israel or us. We are now at a very good entry point.”
Five-year-old Champel Capital specializes in deep-tech Israeli companies, with a layer of active impact investing. On this front, ITC helps reduce CO2 emissions as well as prevent traffic-related deaths per year given that more than 40% of accidents take place at intersections.
Champel Capital raised a capital pool of $20 million in 2017 and invested it in 14 Series A venture rounds including Innoviz Technologies Ltd. INVZ,
Lemonade Inc. LMND,
and Aleph Farms Ltd., a privately held cultured meat company. It also held an initial close of $30 million on the Champel Capital Impact Deep Tech Fund II in January.
Israel-based Champel Capital focuses on agri-food, bioconvergence, industry 4.0, mobility and fintech in a difficult environment at the moment to raise fresh capital from institutional investors.
With stocks now a smaller part of their portfolios due to losses in stocks, institutional investors have been left with an over-allocation in their alternative portfolios.
This means that today they are often more limited to investing in venture capital funds and other alternatives such as growth stocks or private equity buyout funds, because the share of their more liquid holdings in the stock and bond markets as a proportion of their entire portfolio has declined. down.
“Conditions have changed in a very extreme way and we have to be realistic,” Weitmann said. “The nominal value of illiquid investor portfolios has not changed as much as public stocks, so the venture capital portion of their portfolios has gone up. Trying to raise capital in this environment is challenging.”
Fund managers with decades of track record and strong ties to the institutional investor community do better in this environment, but if a venture capitalist is trying to raise their first or second fund today, it’s harder for them, even if they’ve already had some hits from previous investments.
Champel Capital loves food and technology investments like its stake in Aleph Farms.
With 10 billion people expected in the world by 2050 and the high-calorie Western diet achieved by more people in the world, agritech advances remain a critical tool for human food supply.
“You take a few cells and grow the cells and in three to four weeks you have a beef — the meat was never on a cow,” Weitman said. “You can cut water consumption and land. It is very green and sustainable. We should be able to get rid of…the abuse of animals. You will have an unlimited supply of meat that will eventually be better, cheaper and healthier.”
Correction: This story has been updated to remove incorrect information about the name of a capital pool raised by Champel Capital. The firm’s first investment pool was a synthetic fund consisting of 14 deals on a deal-by-deal basis.
