A-Squared Ventures (formerly Arkin Digital Health), headed by Nadav Shimoni, is raising a $40 million second fund. Among the investors are Vintage Investment Partners and the Harel group. The fund is being rebranded as A-Squared Ventures to emphasize the fact that although it was born within the Arkin group it is no longer wholly controlled by it. The Arkin group has acted in a similar fashion in the past in other areas: seeding a fund in-house and then expanding it to take in more investors and operate more independently.
The first Arkin digital health fund invested in twelve companies, and the new fund managed to invest in two companies even before it was launched. The portfolio now includes Eleos, Rhino Health, Revisto, Laguna, Nest, and Siftwell. Although none of the portfolio companies has yet recorded an exit as such, the first fund has already returned money to its investors following follow-on finance for the companies.
A-Squared Ventures is run by Dr. Nadav Shimoni and Dr. Sam Cronin. Shimoni explained to “Globes” today that the fund’s relatively modest size was a deliberate choice. Its aim is to seed companies and invest in them at the start, when investment rounds that are too large are liable to confuse the companies. The fund plans to invest $1-2 million initially in each company.
War halts investment
The fund is good news for the biomed sector in Israel, in which only one fund has been raised since the beginning of the war, a $15 million fund by Edge Medical Ventures, while the raising of Pitango HealthTech’s $120 million fund began before the war. By contrast, in high-tech, venture capital firms continued to raise funds during the period.
“Digital health has been a lively sector in the past six months, with six exits of over $1 billion,” Shimoni told “Globes” today. “There are huge hedge funds looking at this sector. Four years ago, Microsoft bought Nuance, an artificial intelligence company with healthcare products, for $19 billion. That acquisition had a big impact on the market, for example on the preparedness of other companies to make their own acquisitions, such as the acquisition of Cerner by Oracle for $28 billion in 2022. Among the acquiring companies are both large technology companies and companies focused on healthcare.”
Which companies in the sector are you investing in
“We divide the market not according to the technology, but according to who pays, and that is despite the fact that I am originally a doctor. We decided to focus on companies that deal with the operational side of the healthcare business, and not on the clinical side, although some of our companies develop from the operational side to the clinical side as time goes on. A clinical solution is much more complicated at the business level. We again go back to the idea that our activity has to be built modestly, realistically.
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“Even with these products, which are similar to software products in other industries, it is still not necessarily possible to adopt tactics from other industries fully. For example, making a lot of noise and investing a lot in marketing doesn’t always work in this field. It’s true that, unlike other biomed companies, our companies reach sales quickly, and so need marketing as well, but the question is how to market, and generally the challenge is to identify very precisely who makes the decision.”
Do you feel that the end of the war enabled you to raise the fund?
“On the contrary, fund raising almost closed while the war was going on, and that shows how this field attracts attention in Israel even in challenging conditions.”
Published by Globes, Israel business news – en.globes.co.il – on November 6, 2025.
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