PrivateEquityCentral.Net
Meet the Manager

Investing in Israeli Technology
November 6, 2009

Maha Ibrahim is a technology trend-spotter with a story to tell. After landing a Ph.D. from MIT, she climbed the executive ladder at Qwest Communications, where the telecom boom made a lasting impression on her. She joined Canaan Partners in 2000 and soon established herself as a rising star at the venture capital firm. Her expertise is in digital media, networking and wireless technology. Ibrahim is a general partner at the firm. 

PEC: Is Israel “Silicon Valley East?”

MI: Absolutely. We opened up our office there in 2006 and it has been a very good experience for us. Relative to Silicon Valley, obviously, it is a smaller market. But it is a much more concentrated market, with a lot of funding there and a lot of entrepreneurial spirit there. It is a very thoughtful and fertile environment for an entrepreneur.

PEC: Is the entrepreneurial spirit still alive in Silicon Valley?

MI: Yes, the market difference that I see between the U.S. and Israel is hardware development, which has not been in favor in the U.S. venture capital market in Silicon Valley for a while, and that is not to say that there has not been innovation there because there has. But it is a more expensive environment to do so here and there is such a tradition of hardware development on the wireless and chip side in Israel that it has really grown into something that is quite attractive. We are seeing a lot of Silicon Valley in the market of Web 2.0, wireless, and software. But certainly hardware has lessened over time.

PEC: Given the dotcom then telecom bubble, is there investor leeriness toward technology in general?

MI: I think that in the fourth quarter of 2008 and the first quarter of this year, there had been such macro uncertainty in the marketplace that everyone had to step back and take a breath. That is not to say that interest waned, but there was a macro factor surrounding technology. Now that the market has returned to some semblance of normalcy, I think that the interest is coming back in a huge way for VC.

PEC: I just finished “The Next New Thing” about Jim Clark. Is it that exciting to work with a technology entrepreneur?

MI: There is something so magnificent about the tech entrepreneur in that they have this kind of innate optimism that the average Joe does not necessarily have, and they have the ability to see opportunity that other people cannot. It is remarkable to see them overcome adversity and the opinion of people who are telling them that it is not possible.

PEC: What did you take away from working during the telecom boom?

MI: So much. It was an incredibly wild ride. It was extraordinarily phenomenal time in that we enabled so much technology to bring to bear, including what we have seen with video quality over the Internet. So the fruit of the labor is what broadband can bring. It has come full circle.

PEC: Is there a “Next Big Thing?”

MI: I would say it would depend on the space, but absolutely in networking and datacenter, the trend of virtualization is enormous and real. And it is transforming the datacenter and energy usage that a datacenter has and the reduction of the expense to get an application running. It is very transformative. At the same time, wireless 4G technology will also be transformative. Although that is a way out. What they enable is not evident then, but come to bear when the infrastructure is in place. So I look forward to seeing what the fallout of all this build out will be.