Case study: OurCrowd
Snowball Effect has partnered with OurCrowd, one of the world’s leading venture capital (VC) investment platforms, to provide Kiwis with exclusive access to global investment opportunities.
Background
In 2021, Snowball Effect partnered with OurCrowd, a global venture investing platform. The ongoing partnership provides New Zealand wholesale investors with access to OurCrowd’s index funds of high growth companies across a range of exciting sectors.
To date, Snowball Effect has provided investors with access to two of OurCrowds Index Funds, the OC50 Series IV and Series V, and raises for several high-growth companies that are part of OurCrowd’s network.
About OurCrowd
Established in 2013, OurCrowd quickly has become the most active venture investor in Israel - a country renowned for its VC investors and tech start-ups. Each month the OurCrowd’s team review hundreds of investment opportunities and select a handful to be part of an OC50 index fund. As of March 2022, OurCrowd has more than USD1.8B in committed funds for 322 portfolio companies from 192,000 registered investors.
The OC50 series funds provide wholesale investors with access to venture capital opportunities that are otherwise only available to institutional and large family office investors or high net worth individuals. Each OC50 fund includes a diverse portfolio of 50 companies across various industries, locations and growth stages. Previous OurCrowd funds have included businesses that have since been acquired by global multinationals such as Intel, Nike, Oracle, Samsung, and Uber and have been listed on global exchanges such as NASDAQ. Industries that have been represented in OC50 funds include agritech, artificial intelligence, cybersecurity, food tech, and healthcare.
Since its launch in 2017, the OurCrowd’s OC50 Series I fund returned nearly 20% of investor capital during 2020. As of the end of Q2 2021, seven exits have generated 2.67x return on invested capital.
Seven OurCrowd exits
Beyond Meat
A Los Angeles–based producer of plant-based meat substitutes, the company IPO’d in 2019, which resulted in a 3.1x gross return.
Jump
Uber acquired bike-sharing start-up JUMP for USD200m, which led to a 3.4x gross return.
Lemonade
Insurance provider Lemonade IPO’d on the NASDAQ in 2020, with a 2.4x gross return.
Magisto
Tech company Magisto uses artificial intelligence technology to help make video editing fast and straightforward. Vimeo acquired them for USD200m which resulted in a 2.0x gross return.
Cognigo
Computer software company Cognigo was acquired by NetApp, a cloud data services and data management company, for USD70m, which realised a 2.3x gross return.
Wave
Small business financial solutions platform Wave was acquired by US tax preparation company H&R Block, Inc for USD405m, with a 2.1x gross return on invested capital.
Kenna
US risk-based and vulnerability management software start-up Kenna Security was acquired by IT powerhouse Cisco in 2021, with a 3.45x gross return.
Partnering with OurCrowd
Following the success of Series I, OurCrowd has gone on to launch Series II, Series III, Servies IV, and Series V, the latter two of which were accessible to Snowball Effect wholesale investors via our platform.
Snowball Effect’s collaboration with OurCrowd provides New Zealand wholesale investors with exclusive local access to OurCrowd’s OC50 index funds. By investing through Snowball Effect, Kiwi investors have a hassle-free way of investing in an offshore fund, minus the compliance headaches. All investments made through Snowball Effect into the fund are held within Snowball Effect Nominees.
The outcome
More than $3.3m was invested through Snowball Effect by 95 investors into the OC50 Series IV and Series V Funds. Kiwi investors committed nearly $1.2m to Series IV and over $1.1m to Series V. As of mid-2021, there have been four exits from the Series II Fund with a gross internal rate of return of 21.1% and 1.29x invested capital.
New Zealanders have been able to access, through Snowball Effect, the OC50 Series IV and Series V, and investment opportunities with companies within OurCrowds’ network. These include California-based food-tech company Ripple Foods, Canadian life science therapeutics company SaNOtize and Silicon Valley based vertical farming startup Plenty. We look forward to offering further opportunities like these to New Zealand wholesale investors.
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