Q2 2025 Update
Dear Limited Partners,
Despite the war with Iran in June and the shift to remote work during the conflict, our portfolio companies remained highly motivated and focused on meeting their business objectives. As such, Joule continued to execute on our Q2 strategy, which emphasized four specific areas within our business:
1. Supporting high momentum portfolio companies with their capital raise objectives in order to maintain and/or enhance their trajectories
2. Seeking out solutions for underperforming portfolio companies and/or planning to shut down those where necessary
3. Capitalizing on a Joule-exclusive investment opportunity within our best performing, highest concentration portfolio company Coralogix
4. Investing in new Fund V portfolio companies to further take advantage of the deployment conditions
Below we will provide additional information on each of the aforementioned efforts:
SUPPORTING PORTFOLIO COMPANY CAPITAL RAISES
As we've mentioned over the last year or so, Joule IV is seeing considerable momentum across the highest number of single fund portfolio companies since our inception 16 years ago. Of the partnership's 13 investments, six or 46%, are generating $1M or more in annually recurring revenue. At their current growth rate, by the end of this year, three or roughly 25% will have more than $5M in ARR, while the other three should be at anywhere from $3-4M in ARR. To put things into perspective, by year three in both Joule I and II, we had only one company in each fund generating more than $1M in ARR. And we're not losing steam -- the first investment out of Fund V, ControlMonkey (September 2024) surpassed $1M in ARR this quarter, up from $200K in ARR when we first met the company less than a year ago (more on that below).
Those with meaningful growth and that are qualified to attract growth rounds of funding are doing so and Joule is supporting those companies by helping with the preparation of investor materials and introductions to prospective investors. Below are a few portfolio investments where Joule has been dedicating outsized time and attention:
ARNICA - www.Arnica.io / Fund IV
Technology / Developer-first application security platform that eliminates the friction between enterprise security and software development teams.
Growth / 250% year over year surpassing $2M ARR in 2024 and doing so with 1/4 to 1/3 of the capital of their competitors. Aiming for $5-6M in ARR by EOY 2025.
Capital Raise Objectives / $15-20M Series A - in term sheet negotiations with a lead investor for this round
Joule Value Add /
1. Provided page by page guidance on Arnica's investor collateral to help the founders deliver the most compelling narrative to prospective investors.
2. Introductions to prospective lead investors such as 1011 Ventures (U.S.), Jump Capital (U.S.), Scale Venture Partners (U.S.), Red Dot Capital (Israel), Israel Growth Partners (Israel), Next47 (Israel), and Norwest Venture Partners (U.S./Israel).
ACSENSE - www.acsense.com / Fund IV
Technology / The most robust and effective backup and recovery platform for Okta (NASDAQ: OKTA), one of the leading Identity Access Management (IAM) solutions in the market. In the process of also developing a solution for Microsoft's IAM product, Entra, which will more than double their Total Addressable Market.
Growth / 250% year over year surpassing $1.5M ARR in Q2 2025. Aiming for $3M ARR by EOY
Capital Raise Objectives / Completed an oversubscribed $3M bridge round led by Joule Ventures IV
Joule Value Add /
1. Syndicated more than 30% of the round bringing in funds such as Skywell Venture Partners (Israel) and Hustle & Trust Fund (U.S.)
2. Joule facilitated a connection to a candidate that Acsense hired as VP of Government Sales in the U.S. to start taking advantage of the immense opportunities at the Federal level. This kind of hands-on support is
CORBEL - www.corbelpay.com / Fund IV
Technology / Delivering a digital platform to equipment sales teams to enhance the transparency, velocity and magnitude of sales
Growth / Early revenues (>$100,000 ARR)
Capital Raise Objectives / Completed a $4M seed round of financing led by Ibex Investors (Israel)
Joule Value Add / Worked closely with the CEO prior to the round to effectively handle the departure of a co-founder in a way that would not create a red flag for future investors
SHIELD-IOT - www.shieldiot.io / Fund III
Technology / AI-driven agentless Internet of Things (IoT) security designed to secure such things as points of sale, mobile transactions, and other edge devices
Growth / 2025 has proven to be a breakout year for ShieldIoT after years of seeking out product market fit. Recently signed a highly valuable distribution agreement with Mastercard after a year of partnership development.
Capital Raise Objectives / Completed a $1M bridge round of financing led by internal investors, Springtide Ventures (Czech)
Joule Value Add / Worked closely with the CEO prior to the round to effectively handle the departure of a co-founder in a way that would not create a red flag for future investors
ATOMATION - www.atomation.net / Fund III
Technology / Connected smart sensors used to assess the behavior of machinery, engines, and utility infrastructure
Growth / Atomation has continued to add major enterprise customers to their client roster including significant partnerships with Honeywell that could produce up to $5M a year in revenue once fully established. Other logos include Marmon, a Berkshire Hathaway company, which has the ability to generate $3-4M annually for Atomation, as well as Vertiv (NYSE: VRT) that could also be a $1-2M annual revenue producer for Atomation.
Capital Raise Objectives / Completed a $2M capital raise led by a UK-based private investment firm
Joule Value Add / Provided ongoing support to align the Board on taking outside capital given Atomation's profitability
SEEKING OUT SOLUTIONS FOR UNDERPERFORMING COMPANIES
Not all companies are going to succeed of course. For those companies that either consistently underperform or begin to stagnate after a short period of growth, Joule's desire is to find outcomes that free up firm resources and dollars to focus on assets that have a chance at material returns. Below are a few of the portfolio companies where we've had to seek out such solutions:
MIRATO - www.mirato.com / Fund IV
From 2022 to 2024 Mirato saw significant growth with their Third Party Risk Management (TPRM) platform. Customers included Mars, Inc. and BMO Bank, as well as other mid-size to large enterprises and financial institutions. However; in late 2024 the company saw some of that momentum slow with prospective customers pushing agreements into 2025. At the start of 2025, those deals had largely disappeared and the pipeline was not significant enough to show continued growth. Rather than investing additional capital, the Board decided it was time to find a buyer for Mirato. A buyer has been identified and a term sheet has been secured, which will provide Joule IV $2.3M or roughly 70% of the value of its investment in equity in the acquiring entity - a fast growing financial technology company backed by a leading U.S.-based private equity firm. The details of this transaction will be provided to investors upon completion. Joule IV invested $3.35M or 6% of fund capital into Mirato.
RUPERT - www.hirupert.com / Fund IV
Joule led Rupert's pre-seed round in 2021 alongside IA Ventures out of New York. While the company showed signs of potential and flashes of product-market fit, it never gained enough traction to justify Joule putting up considerable additional capital into the business. At present Rupert is in the process of winding down. Joule IV invested $1.98M or 3.5% of fund capital into Rupert.
CAPITALIZING ON A JOULE-EXCLUSIVE TRANSACTION WITH PORTFOLIO UNICORN CORALOGIX
In 2015, Coralogix had a vision to be the first to market with a cloud-native observability platform to help software development teams roll out better software faster and cheaper. Joule II led the company's seed round at that time at a $3M valuation. Since then, Coralogix has made good on that vision and is chipping away at market share held by the publicly traded observability giants such as Splunk (Cisco), Datadog, and Dynatrace. As the company's revenue began to soar, we at Joule used Special Purpose Vehicles (SPVs) to give our investors the ability to amplify their ownership in this high performing business. Through SPV III, IV, V, and now VI, we have made Coralogix our highest conviction, highest concentration investment across our 50+ portfolio companies. In the context of Coralogix's $115M Series E round announced in June, Joule had the opportunity to invest its pro rata directly in the business. In addition, Joule had exclusive access to shares being sold by an early employee who was looking for liquidity after years of successful service to the company. That secondary transaction was being offered to Joule at a significant discount to the $1b+ valuation at which the aforementioned Series E was being invested. Joule's blended primary and secondary pricing meant that new SPV investors were purchasing shares in Coralogix at a $700M valuation or roughly a 30% discount to the new round's price per share. In total, Joule SPV VI purchased an additional $12.7M worth of Coralogix stock, which we believe will deliver a multiple in cash when the company pursues a strategic outcome in the next 18-36 months, if not sooner.
ACTIVELY DEPLOYING OUT OF FUND V TO CONTINUE TAKING ADVANTAGE OF MARKET CONDITIONS
As we've been discussing since 2022, early stage deployment conditions in Israel have changed dramatically since the market peaked in 2020-2021. While sectors like cybersecurity and certain types of AI businesses have returned to peak level valuations, we at Joule have continued our focus on less hyped opportunities and industries where we are finding more mature technologies at investor-friendly terms and pricing. One such example is Tel Aviv-based ControlMonkey, the first investment out of Fund V, which was executed last September. When we first met the company in August of 2024, they had roughly $200,000 in Annually Recurring Revenue. By the time we finished the deal in September, they were already at $500,000 in ARR. This past quarter, ControlMonkey surpassed $1M in ARR representing 600% growth in less than a year. Joule V co-led ControlMonkey's $5M seed round at a $13M pre-money valuation - pricing that is at least 30-40% less than they would have captured 2-3 years earlier.
It's a similar story with Joule V's second investment, New York and Tel Aviv-based Cache, which the fund executed this past April. Cache is building the market's first automated cash management solution for financial institutions. Selling into financial institutions is notoriously difficult and comes with long sales cycles. Even getting in the door for a pilot or proof of value can take years. At the seed stage, Cache is not only engaged with a half dozen or so U.S. banks and credit unions as design partners, but they are in the process of finalizing a 7-figure annual deal with one of the largest credit bureaus in the States. This type of technology, with their revenue and their proven ability to effectively navigate tough to penetrate financial institutions in a more efficient way than their competitors would normally come with a pricing premium. Joule V led Cache's $4.5M seed round at a $12M pre-money valuation. In addition to being the lead investor here, we syndicated roughly 30% of the round, and made valuable introductions to Cache to organizations such as Truist Bank and VyStar Credit Union.
