Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Guy Resheff, Grove Ventures was recorded in December 2017. He is no longer with the firm.
Guy Resheff, Partner at Grove Ventures, focuses the spotlight on Israel.
Sramana Mitra: Tell us about your investing focus. How big is the fund? What size investments do you make?
Guy Resheff: Grove Ventures is an early stage VC focusing on deep technology companies. Anytime you see a very tough technical problem involving deep science, that’s what we are all about. Our fund size is $110 million. We invest in seed and A round. We continue to support the company all through their lifecycle.
We focus primarily on Israeli-related opportunities. The vast majority of the companies originate in Israel. Like most companies in Israel, they become US companies very quickly. In our case, it’s very typical to have a model where engineering continues to be located in Israel but corporate headquarters and business development function move to the US. We are also interested in companies that are Israeli-related. I also encourage companies that do not have any Israeli company but are thinking of having one to come talk to us.
Sramana Mitra: Can you double-click down on the types of investments? You’ve already said you like deep technology. Talk about industry sector. Is it B2B, B2C, or both? Also elaborate a bit more on the stage. You said seed. How do you define seed? What kind of validation are you looking for to get into a deal?
Guy Resheff: To answer your first question, we look at things slightly differently than other VCs. For us, it’s about technology first. We look for technology that would have some major impact on a very large market. These are technologies that tend to be so complicated that are not popular. These are technologies that have deep scientific components that are sometimes hard to assess. The technology is difficult but not impossible.
We find that there are really three secular technology trends that over the last few years have reached a tipping point. The first is sensing. Everything around is being sensed whether it’s our bodies, machines, or buildings. There’s a tremendous amount of new data being collected about the physical world. Secondly, the cloud. By now, the cloud has matured to a point where it is possible for even a small company on a shoestring budget to collect all of these data and move it to a central location, store it very cost effectively, and operate on it cost effectively. The third is artificial intelligence. You can now generate insights on data that weren’t possible before.
Anything at the middle of these three trends, we tend to get very excited about. That can be applied to dozens and dozens of industry verticals. We are vertical agnostic. There are many cases where multi-billion dollar industries can be really revolutionized using these types of technologies. Therefore, we don’t necessarily look at ourselves as a B2B or B2C technology. It’s all of the above as long as there is a key differentiated technology.
Sramana Mitra: How do you decide to get into a company? What kind of validation are you looking for in an investment thesis?
Guy Resheff: We’re typically the first institutional money. Sometimes, it would just be two guys and a PowerPoint or it could be a company that has gone through several millions of dollars of technology validation. The type of validation that we look for focuses on ensuring that there is good evidence that the research is being completed – proof of existence in some way.
We recently invested in a company that is developing a novel sensor for autonomous driving that complements the things we’re familiar with like cameras and radars. In this case, this is a sensor that is working on short-wave infrared and therefore can see through poor weather. This came out of university research where a single pixel of such an imager was fabricated in a CMOS process.
We feel there’s a good chance that the research here will create a major breakthrough. It could be in every autonomous vehicle of the future. From here, there’s a tremendous amount of development that remains in getting this to product grade. That’s one example of a typical entry point that we look for.