Catalyst seeks to balance uncertainty with Israel’s economic strength
Lisya Bahar Manoah understands client concerns and remains hopeful that tech companies will be able to weather the country's political storm
Catalyst Investments, a Tel Aviv firm that manages $450 million in assets, is trying to strike a balance in the face of market jitters fueled by economists’ warnings that new government proposals pose a risk to Israel’s future stability.
On one hand, senior partner Lisya Bahar Manoah told The Circuit, investors new to Israel’s market for technology startups are “taking a wait-and-see approach.” They’re cautiously gauging the impact of Prime Minister Benjamin Netanyahu’s campaign to overhaul the court system, she said, which has sparked mass street protests and prompted some investors to move their cash overseas.
On the other hand, Catalyst’s management team – which includes founding partners Edouard Cukierman and Yair Shamir, a former Israeli cabinet minister and ex-chairman of Israel Aerospace Industries – has weathered previous crises and is telling clients for now that their money is safe.
“The current situation is very challenging, but I believe that Israel’s high-tech industry is strong and stable, and has overcome many challenges in the past, so hopefully, we’ll get through this one as well,” Manoah said. “When it comes to our current investors, although they have expressed concerns, they do not intend to withdraw their investments from our fund.”
Israeli cybersecurity startup Wiz, which raised $300 million in February in a private funding round that valued the company at $10 billion, alarmed Israeli investors when CEO Assaf Rappaport said last week that the money would be retained in U.S. banks because of economic concerns caused by the proposed judiciary changes. Hundreds of Israeli and U.S. economists signed a letter appealing to Netanyahu to stop the judiciary reforms before they cripple the economy.
Originally from Istanbul, Manoah moved to Austria at 17 to study mechanical engineering, earning a masters of science degree from Vienna University of Technology, before moving to Israel in 2011. She has 15 years of experience in private equity and global companies, with a focus on raising capital, mergers and acquisitions, and post-merger integration.
Manoah invests in a variety of tech companies active in the fields of mobility, advertising, finance, agriculture and cybersecurity. She has held management positions in companies that include Keter, which makes plastic furniture and other home products and Adama, a crop protection company.
Catalyst, a multi-fund firm, has developed ties in the Gulf and has been talking to investors there on behalf of some Israeli food-safety companies, Manoah said. During the height of the COVID-19 pandemic, Cukierman helped organize an online Israel-UAE investment conference addressing agriculture technology and food security. “We could see how many participants entered the conference that day – it made an impact,” said Manoah. “We are beginning to be highly involved in the Gulf region.” Some of those investors are expected at the GoForIsrael conference in May that is being organized by Cukierman, who is also founder of Cukierman & Co. Investment House, and Catalyst.
Among the companies in Catalyst’s investment portfolio is Addionics, which creates batteries of high-energy density for use by electric vehicles and other systems. Manoah said the breakthrough to developing the battery was focusing on physics rather than chemistry. “This means that there is no need to wait until the next generation of battery arrives. The technology enables battery improvements today.” The company recently unveiled its first prototype and opened new offices in Tel Aviv.
Manoah noted that Addionics’ performance, as well as many other companies in which Catalyst invests, has been affected by Russia’s invasion of the Ukraine and its impact on the global supply chain. “It’s how one manages that impact that is important,” she said. “What is very important at the growth stage of investment is how one goes forward over the coming two-year period. Not only do we follow the investment and make sure the company has a [cash] runway, but also, we look at how they can best manage uncertainty.”
Some Israeli companies have managed their fundraising skillfully and have enough cash for the next two years, she said. Others make good candidates for mergers and acquisitions.
Manoah is also bullish on Nexar, which developed a vision network for vehicles that uses artificial intelligence to generate real-time maps and enable the use of autonomous vehicles. A third company in which Catalyst has invested since 2019, and where Shamir is chairman, is Arbe Robotics, which develops high-resolution radars; it trades on the Nasdaq. The product creates images that nearly match the resolution of cameras, but function like radars. When placed on car dashboards, they can see 400 meters ahead under all weather and light conditions. “We are a big believer in autonomous driving with sensors,” she said.
Arbe co-founder and CEO Kobi Marenko said Catalyst’s involvement and Shamir’s guidance have been great assets. “There is almost no situation one can imagine that he hasn’t been in. This has been a critical contribution to our ability to navigate complex business processes,” said Marenko.