Venture firm Champel Capital leads Intelligent Traffic Control investment, eyes fintech and agritech despite choppy waters for capital deployment

Amir Weitmann, managing partner at Champel Capital, said the firm is not pulling back from investments even as others move to preserve cash and put less money to work in the face of a potential recession and inflation.

Weitmann said it was a mistake for investors to divert capital away from alternatives during a historic opportunity in some emerging industries such as agritech or fintech. 

“Last year, investors poured money into shoddy companies at ridiculous valuations,” Weitmann told MarketWatch. “A year later, they’re avoiding much less speculative investments at much less frothy valuations.”

Weitmann said he sees plenty of good or great companies out there at more attractive prices.

“You have solid companies with good valuations and people can’t invest,” Weitmann said. “This has nothing to do with Israel or us. We are now at a very good entry point.”

Five-year-old Champel Capital specializes in deep-tech Israeli companies, with a layer of active impact investing. On this front, ITC helps reduce CO2 emissions as well as prevent traffic-related deaths per year given that more than 40% of accidents take place in intersections.

Champel Capital’s Impact Deep Tech Fund I in 2017 raised $20 million, which it invested in 14 Series A rounds including Innoviz Technologies Ltd.
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Lemonade Inc.
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and Aleph Farms Ltd., a privately-held cultured meat company.

Israel-based Champel Capital focuses on agrifood, bioconvergence, industry 4.0, mobility and fintech in a difficult environment currently for raising fresh capital from institutional investors.

With equities now a smaller part of their portfolios because of losses in stocks, institutional investors have been left with an over-allocation in their alternative portfolios.

This means they are often more limited nowadays to invest in venture capital funds and other alternatives such as growth equity or private equity buyout funds, because the proportion of their more liquid holdings in the equities and bond markets as a share of their entire portfolio has gone down.

“The conditions have changed in a very extreme way and we have to be realistic,”  Weitmann said.  “The nominal value of non-liquid investor portfolios has not changed as much as public equities, so the venture capital part of their portfolios has gone up.  Trying to raise capital in this environment is challenging.”

Fund managers with decades-long track records and strong ties to the institutional investor community are faring better in this environment, but if a venture capitalist is trying to raise their first or second fund nowadays, it’s more difficult for them, even if they’ve already scored some hits from previous investments.

Champel Capital loves food and technology investments such as its stake in Aleph Farms.

With 10 billion people expected in the world by 2050 and the calorie-rich Western diet achieved by more people in the world, agritech advancements remain a critical tool for the human food supply.

“You take a few cells and you grow the cells and in three to four weeks you have a steak – the meat was never on a cow,” Weitman said. “You can cut water consumption and land.  It’s very green and sustainable. We are going to be able to get rid of the…mishandling of animals. You’ll have an unlimited supply of meat that’s eventually going to be better, cheaper and healthier.”