Venture capital fund bringing together Colorado, Israel

The Israel-Colorado Innovation Fund — a fund that partners the country and the state to support Israeli startups looking to make their U.S. headquarters in Colorado — has raised $3.8 million.

The fund has plans to raise $10 million, according to a Form D filed with the Securities and Exchange Commission on Oct. 25.

The newly-founded fund is a partnership between Israeli lawyer Gili Elkin and Innosphere CEO Mike Freeman. The ICI Fund has an adviser in Israel. The fund is supported by Gov. John Hickenlooper and the Israeli Innovation Authority, the latter of which will match funds to the ICI Fund.

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What sets this partnership apart from others is that it is the first in which the Israeli government entered with a private venture capital group like the ICI Fund, Elkin told BizWest.

“Gov. Hickenlooper’s support was crucial to the agreement, as was the Israeli Innovation Authority on board,” she said. “It’s led to us attracting investors, led to our ability to bring Israeli tech into Colorado. A lot of credit needs to go to Gov. Hickenlooper and the innovation authority to have this unique agreement with us.”

In addition to bringing Israeli companies to Colorado, the fund will also invest in them. Elkin said the startup that is getting the fund’s first investment will be named before the end of this year.

Israel is second only to Silicon Valley when it comes to number of startups, which has led the country into being called the Startup Nation. Israel particularly excels at startups in the water and energy sectors — the nation is 60 percent desert, but manages to export water — which made Colorado an idea partner.

“Colorado is also very strong in energy, because of its universities, federal labs and companies like Advanced Energy here,” Elkin said. “And as far as water, Colorado is arid and needs solutions too. Overall, Colorado was the best place for startups to come now, because of its rapidly growing startup ecosystem.”

Elkin said that she saw Colorado as a good place for Israeli startups to get their foot in the door and get the attention they need, in a less crowded market than places like New York, Silicon Valley or Boston.

“Colorado may become crowded in four to five years, but now is the perfect time for startups to come and grow and penetrate in the U.S.,” she said. “I see this being a great springboard for Israeli tech to startup penetration in the U.S.”