Photo Credit: Riskified website screenshot
Riskified CEEO and co-founder Eido Gal.

Meet Pitango VC, Israel’s largest venture capital fund with over $2.8 billion under management. With offices in Herzliya and Tel Aviv, Pitango has invested in more than 250 companies, bringing in A-list investors such as Time Warner, Citigroup, Eastman Kodak, Deutsche Bank, and HarbourVest Partners.

Pitango was founded as Polaris Venture Capital in 1993 by Rami Kalish, as part of a government initiative named Yozma (Initiative in Hebrew) that offered attractive tax incentives to any foreign venture-capital investments in Israel and offered to double any investment with funds from the government. The fund enjoyed a major boost in 1996 when it was joined by Chemi Peres, son of one of Israel’s most influential politicians, the late Shimon Peres, who helped raise more than $100 million.


The Secret
If you want to know the secret of Israel’s startup nation and amazing hi-tech success stories, it all began with government-sponsored efforts such as Yozma and continued with fantastic follow-through by the likes of Pitango.

Idit Muallem Yadid, a senior partner at Pitango, in 2020 shared with Globes the satisfaction she felt at having been able to support unicorn ventures such as Via, Tabula, APS.Player, and Riskified. They all owe their success to this venture capital fund, which in turn owes its success to the Israeli government.

Riskified is a publicly traded company that provides software to prevents fraud in digital business. It was founded in 2012 by Eido Gal and Assaf Feldman, and by 2018 secured $63.7 million in funding. Yada, yada, yada, on July 28, 2021, Riskified launched its initial public offering on the NYSE, valuing the company at $4.3 billion.

Thank you, Pitango, and thank you, the Israeli government’s Yozma program. Of course, the venture fund and the state of Israel didn’t support Riskified as an act of charity. The company’s success is the country’s success: it provides jobs and pays taxes, more power to them.

Remember Riskified co-founder Eido Gal? On Wednesday morning, he informed his employees: “In light of the rapid pace at which Israel is changing, I wanted to express my position in writing and share with you the actions our company has taken.”

According to Gal, the judicial reform could “lead to the dissolution of our independent judicial system,” which will lead to “a significant and prolonged economic recession in Israel… I believe that only bad results will come from this ‘reform.’”

Gal announced several steps he is taking “to ensure the long-term success of Riskified.” Among other things, Gal said the company will take about $500 million out of Israeli banks. “We fear that the economic situation will continue to deteriorate, and to maintain economic stability, the government will limit the transfer of funds and the withdrawal of funds in large amounts,” he explained.

Mind you, Israel’s central bank is sitting on an estimated $204 billion, enough to stabilize the economy for a few years before sending the money police out to stop you from taking your dollars out. But wait, there’s more:

Gal announced that Riskified will speed up the development of its R&D center in Lisbon, Portugal. He offered several relocation packages to employees who wish to follow him to the land of “Beauty and Simplicity,” the slogan picked by Portugal’s tourism ministry to encourage post-corona visitors. Riskified will support any employee who wants to leave Israel.

Now, don’t delude yourselves that Riskified is moving to Portugal over political sentiments. It appears that the company has already been in the process of joining a trend that began in 2016 when the Portuguese government decided to transform its country into Europe’s Silicon Valley.

Life in Portugal is cheap, especially compared to Israel, and in recent years it has become a technological paradise. The government’s new policy has already attracted foreign investors, and relocating hi-tech businesses are granted special visas. As a result, Lisbon has seen the openings of offices of Google, Amazon, and other technology giants.

Eido Gal found a perfect alibi in the pending judicial reform, which gives him the cover he needed not to appear ungrateful, spitting in the government well from which he once drank. He joins Assaf Rappaport, the co-founder of Wiz, who announced raising $300 million that would remain outside Israel.

If ever there were the proverbial kids who took their baseball and went home because the coach won’t let them pitch – it’s Israel’s hi-tech fair-weather patriots (not sure how to form a soccer metaphor, although it should probably be easy enough).

Here’s hoping karma will catch up with them.


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