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Israeli Healthtech Venture Fund Sees Industry ‘Revolution’

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(Bloomberg) -- Israel’s biggest venture investor in health technology sees “a couple” of its portfolio companies going public next year, as firms prepare to cash out after the pandemic boosted their valuations.

aMoon, which manages $1.1 billion, already had several exits in 2020, including the initial public offering of Seer Inc., partner Tomer Berkovitz said in an interview. Shares in the California-based genomics company surged to $63 this week, valuing it at $3.7 billion, a nine-fold increase over the price of aMoon’s initial investment a year ago, he said.

Investments in health technology firms have boomed this year, especially in companies that benefited from the disruption wrought by Covid-19. The restrictions on movement forced health-care regulators to open up virtual access to doctors and let companies use artificial intelligence in drug development, in turn causing a rush of investment in startups selling advanced technology in those fields, Berkovitz said.

aMoon, whose backers include the former chairman of Check Point Software Technologies Ltd. Marius Nacht, is also investing in a California-based startup as part of a funding round that will value it at $1.2 billion, according to Berkovitz. He declined to give further details on the company.

One significant miss for aMoon was Biondvax Pharmaceuticals Ltd., an Israeli firm whose stock plunged more than 90% in October after a failed late-stage clinical trial for the development of a universal flu vaccine. The investment belongs to aMoon I, a $200 million fund bankrolled exclusively by Nacht.

The Israeli venture capital firm still has about half of its $750 million aMoon II fund available for investment, and it’s scouting for startups in areas such as AI-powered diagnostics and early disease detection, Berkovitz said.

Read more: Israel’s Largest Health VC Ups Fund to $750 Million on Virus

Competition for deals is only getting stronger and startup valuations have jumped as a result, but there is still room for companies to grow given the size of the U.S. health-care market, he said.

“The question is always going to be where is the valuation relative to the maturity of the revolution,” Berkovitz said. “The market is getting ahead of the curve. But the revolution is real.”

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