Top cyber entrepreneurs form joint investment fund

Entrepreneurs and investors Mickey Boodaei and Dan Amiga, and their US partners Rakesh Loonkar and Mike Fey, have decided to set up a joint investment fund, “Globes” has learned. Loonkar will be the general partner of the fund, and the three other will be limited partners and will continue as entrepreneurs in companies they have founded: Boodaei at Transmit Security, and Amiga and Fey at cybersecurity company Island. The four will also continue to invest in other funds, such as Gili Raanan’s Cyberstarts.

According to industry sources, the joint fund will be called Picture Capital. The idea behind it is to support Israeli high-tech following the withdrawal from the region by investment funds because of the financial crisis in the sector, together with the political and security instability in Israel.

The four entrepreneurs have already made joint investments, of which one has yet to be made public and the other is in the new cybersecurity company of Gur Shatz, Cortanix. “Globes” recently reported that serial entrepreneur Shatz had left Cato Networks because of differences of opinion in the other entrepreneur behind the company, Shlomo Kramer over the founding of the new company, which has already raised NIS 21 million. The four invested in Cortanix alongside Cyberstarts.

The consolidation of the resources of the investors into one body with joint decision making positions Picture Capital as a significant player in the global venture capital industry and raises the weight that each of them carries in competing for deals with funds such as Cyberstarts, Glilot and Team8. Cyberstarts itself raised its capital from, among other sources, serial cyber investors, including Loonkar and Boodaei, Nir Zuk, Shlomo Kramer, Assaf Rapaport, and Amichai Shulman.

As far as is known, the investment fund is not yet operating as a standard venture capital fund, and it is not expected to raise capital from external institutional investors. Nor has any minimum or maximum been set for raising the capital. At this stage, it has at its disposal the capital accumulated by some of the wealthiest entrepreneurs in the industry, headed by Loonkar, a serial investor in Israeli cyber companies whose acquaintance with local entrepreneurs goes back to the cyber company in which he worked alongside Nir Zuk, OneSecure. Zuk and Loonkar are still close, and sometimes make joint investments. The investment potential of the new fund is thus estimated in the industry at many tens of millions of dollars.

Loonkar and Boodaei founded cybersecurity company for banks Trusteer, sold it for $850 million to IBI a decade ago, and immediately afterwards founded Transmit Security, which held one of the largest ever fund raising rounds in Israel, securing $543 million in June 2021 at a valuation of $2.74 billion.

Loonkar served a VP sales of the company, in addition to his role as founder and president, but decided to step down from that role earlier this month in order to focus on the new fund. Boodaei is CEO of the company, and he is expected to remain in that role at the same time as continuing his investment activity via Picture Capital.

The other two investors in the fund, Dan Amiga and Mike Fey, are also prominent figures in the Israeli cybersecurity sector, although they represent a newer generation than Boodaei and Loonkar. The pair founded and manage Island, a cybersecurity unicorn developing a secure enterprise browser, and a direct competitor of Talon Cyber Security, recently sold to Palo Alto Networks. Both Amiga and Fey made earlier investments in other cybersecurity companies that went on to be sold, some of them for hundreds of millions of dollars, among them Axis Security and Demisto, and they are shareholders in several other companies.

Loonkar and Boodaei are among the leading investors in Island. They participated in the company’s third investment round, which totaled $175 million.

No response was forthcoming from Picture Capital.

Published by Globes, Israel business news – en.globes.co.il – on February 14, 2024.

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