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Asia Technology Investors Help Boost Israel Venture-Capital Fund

Asia Technology Investors Help Boost Israel Venture-Capital Fund
Chemi Peres, managing general partner and co-founder of Pitango Venture Capital, in 2001. Photographer: Ricki Rosen/Corbis

Oct. 1 (Bloomberg) -- Pitango Venture Capital, which manages more than $1.6 billion, filled a $270 million fund with new investors from China, India, Taiwan and Korea amid increased Asian interest in Israeli technology.

“The strategic relationship between Asia-Pacific and Israel in the field of technology is really starting to grow,” Chemi Peres, Pitango’s managing general partner and co-founder, said in an telephone interview.

Peres said cooperation with the Asia-Pacific region should be modeled after the close U.S.-Israeli technology alliance, which includes investment in local venture-capital funds and startups, and establishing local development centers.

Israel, an export-driven economy, is seeking to increase sales to India and China as Europe, its primary market, struggles with a debt crisis. Israel’s second-biggest market is the U.S.

“We see collaboration with the U.S. across the board and the same is now starting to come to reality in China with regards to Israel,” Peres said. He declined to say how much of Herzliya, Israel-based Pitango’s fund was raised from Asia-Pacific investors.

The Asian investors include a communications equipment and systems company, a consumer electronics manufacturer and a conglomerate. They prefer to remain anonymous, said Peres. Two Chinese research-and-development centers that recently set up Israel operations have also done so without public notice, he added.

Fund Oversubscribed

The new fund, which was oversubscribed by $20 million, plans investments in all stages and sectors. Pitango’s fundraising follows a $130 million investment made by Li Ka-shing, Asia’s richest man, in an academic joint venture between the Technion-Israel Institute of Technology and China’s Shantou University.

“This collaboration combines the startup nation with the nation of endless opportunities,” Li said in an e-mail to Bloomberg this week.

Israel is ranked second in the world for availability of quality scientists and engineers and has more startups per capita than any other country, according to data published by the country’s Ministry of Trade and Commerce.

Exports made up about 35 percent of Israel’s gross domestic product in 2012. In the first eight months of this year, about 20 percent of exports were to Asia, according to the Central Bureau of Statistics, while 23 percent went to the U.S. and 31 percent to the European Union.

To contact the reporter on this story: Gwen Ackerman in Jerusalem at gackerman@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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