Red Dot Capital Partners Announces $320M Closing of Third Flagship Fund Targeting Early Growth-Stage Investments

Red Dot Capital Partners has closed its its third flagship fund at $320 million. This fund will invest in early-stage startups in Israel and Europe. The fund’s main goal is to help the region’s most promising tech-driven businesses grow. The partnership includes Yoram Oron and Yaniv Stern (Founding Partners), Barak Salomon (Managing Partner), Atad Peled, and Danielle Ardon Baratz. 

The new fund will continue to invest in early-stage growth companies across a broad range of sectors. It focuses on companies that demonstrate early signs of product-market fit and that are laying the groundwork for scalable growth. Red Dot typically meets founders as early as the seed stage and leads Series A to C rounds in companies generating $1-5 million in annual revenue. Initial investments typically range from $10 million to $ 20 million. The new fund has already invested in four companies: Finout, Stigg, Oligo, and Bria AI.

Red Dot benefits from a distinctive investor base that includes strategic entities and organizations with a wide variety of operational businesses – from traditional industries and logistics, through tech companies and finance institutions to media, and sports. These investors frequently collaborate with Red Dot portfolio companies through commercial partnerships and, in some cases, follow-on investments. This fund’s investor base has expanded to include leading Israeli institutional investors such as Harel, Mor, and Meitav, as well as investors from countries without official diplomatic relations with Israel. This $320 million closing shows that Red Dot is still committed to helping early-stage growth in enterprise tech, AI, and fintech in important European and Israeli markets.

“For some, investing in an Israeli tech venture fund serves as an economic bridge, a first trust-building move toward potential future expansion of the Abraham accords” noted Yaniv Stern. “In today’s complex environment, their decision to invest in Israel’s tech ecosystem reflects their interest and trust – not just in Red Dot, but in the broader Israeli innovation landscape.” 

The fundraising was completed against a backdrop of a challenging venture capital environment: reduced liquidity has limited the availability of capital for alternative investments, uncertainty around company valuations has complicated fund performance assessments, and higher interest rates have made competing asset classes more attractive. Additionally, the situation in Israel following October 7 added further complexity. “We encountered exceptional circumstances – from air raid sirens disrupting investor calls to traveling after October 7 to meet LPs in countries without diplomatic ties to Israel in order to secure signatures,” said Barak Salomon. “Nonetheless, the recognition by global investors of Israel’s position as a leading innovation hub, particularly in AI, cloud, cyber, quantum, defense, and silicon, provided meaningful momentum.”

Red Dot funds have outperformed their peers. The firm’s first fund, launched in 2016, ranks in the top 5% of its global vintage peer group, according to PitchBook and Cambridge Associates. Its second fund, launched in 2020, is already on track to return invested capital to investors – an uncommon feat for its vintage. In addition to its flagship funds, Red Dot manages an Opportunity Fund for follow-on investments in existing portfolio companies. 

Notable Red Dot exits include Global-e (NASDAQ IPO, 2021), currently valued at ~$6B, Armis, acquired by Insight Partners and Google’s investment arm for ~$1.1B and in which Red Dot still holds shares, Granulate, acquired by Intel for $650M, Paragon, acquired in early 2024 by PE firm AE for ~$900M, and Sealights, acquired by Tricentis.

Other recognized portfolio companies include Coralogix, Quantum Machines, Travelier, Ctera, Anecdotes, EverC, SupPlant, and Trigo.

With this third fund, Red Dot Capital Partners  Fund strengthens its position as a strategic backer of high-potential startups across Europe and Israel.