Israel's JVP boosts investment in insurance firm Earnix via new vehicle

By Steven Scheer

JERUSALEM (Reuters) -Jerusalem Venture Partners (JVP) is stepping up its investment in Israeli AI-focused insurance firm Earnix via a new vehicle it is setting up with global alternative asset manager TPG, it said on Monday.

TPG unit TPG GP Solutions is leading a $290 million investment in the new vehicle and will hold a 30% stake in it. Part of the vehicle's investment will go to Earnix.

JVP, an early investor in Earnix, will retain its 54% stake in the insurer, whose AI platform has been adopted by more than 100 large insurance firms including AXA, Banco Santander, Munich Re and Toyota Financial Services. Most of its business is in Europe but the U.S. has grown fast and comprises some 40% of its revenue.

TPG GP will not be a direct investor in Earnix.

Insight Partners will hold 14% and management owns more than 20% of Earnix, which already has annual revenue above $100 million, is profitable and is considered a unicorn - valued at more than $1 billion, according to Erel Margalit, founder of JVP and chairman of Earnix.

Margalit told Reuters in recent weeks he had bought out a number of other investors. Early investors in Earnix had reaped a return of 8.7 times, JVP noted.

The $290 million injection was partly used to buy out those former investors while some of the funds will go into Earnix, Margalit said.

"It's giving me a lot more money to invest. If we want to make an acquisition and if we want to do some more things, there is more where that came from," he said.

Margalit said he believes Earnix, which bought French generative AI firm Zelros in April, has more room to grow before the company is ready for an exit, such as a Nasdaq share offering.

"You need $300 million of revenue in order to go IPO and that will take another year or two," he said. "That will take a little bit more time or a strategic acquisition... When you prepare yourself to become a large, independent company, things happen along the way. Sometimes you get an offer you can't refuse. Sometimes you become an independent company by going public."

(Reporting by Steven Scheer; Editing by Susan Fenton)