VC Fund Cyberstarts Seeks Second Tel Aviv Office Tower for Portfolio Campus
Venture capital firm Cyberstarts, managing $1.4 billion, is negotiating for a second office tower in Tel Aviv. The move expands its cyber campus model, offering portfolio startups rental rates 20% below market price.
The appetite of venture capital firm Cyberstarts for Tel Aviv real estate remains strong. After leasing 15 floors in the Landmark 2 tower in the Sarona district to centralize its portfolio companies, the fund is already searching for an additional high-rise.
Gili Ranaan, founding partner of Cyberstarts, and partner Dor Knafo are currently in talks with several real estate developers to explore options for the fund, which manages $1.4 billion in assets. The venture capital firm is considering leasing space in upcoming projects like ToHa2 or the Spiral Tower, or potentially commissioning a dedicated building tailored specifically for Cyberstarts.
The Cyber Campus Concept
Nine of Cyberstarts' 25 portfolio companies are scheduled to move into the Landmark 2 tower, which is set for occupancy in about a year. The largest companies in the portfolio, including Island Technology, Upwind, and Cyera (currently located in the first Landmark tower), will remain in their existing offices.
The new campus will house mid-sized, rapidly growing startups employing between 100 and 200 people, which have raised significant capital over the past year. These include:
-
Glow
-
Vega
-
A
-
Onyx
-
Surf
-
Spirit
Cyberstarts itself will occupy part of one floor, which will serve as a communal hub featuring a shared gym and a cafe. While each startup will design its own office space, the underlying infrastructure will be standardized to minimize costs.
Financial Structure and Market Impact
Last April, Cyberstarts signed an agreement with real estate firms Melisron and AFI Properties to lease 15 floors totaling 22,400 square meters. The remaining 13 office floors in the tower are leased by Wiz, a former Cyberstarts portfolio company acquired by Google for $32 billion. The upper floors of Landmark 2 are designated for residential use, featuring 116 apartments. The building is expected to receive its occupancy permit (Form 4) by the end of this year.
By negotiating a collective lease through Cyberstarts rather than individual contracts, the portfolio companies secured rental rates estimated to be 20% below market price. However, each startup will pay its rent directly to Melisron and AFI Properties, not to Cyberstarts.
Cyberstarts founding partner Gili Ranaan stated:
"To date, we have made 35 investments and back 4 to 5 new companies a year, meaning many more startups will require real estate solutions. Once our plans for Landmark 2 were announced, demand from our portfolio companies surged. Ultimately, we will occupy multiple towers in Tel Aviv and become the city's largest tenant."
