Israeli startup Constru blames judicial overhaul for insolvency
Israeli startup Constru blames judicial overhaul for insolvency
Tel Aviv court ordered the freezing of the construction startup, which claims investors walked due to domestic political turmoil, resulting in a debt of $4.5 million
Israeli startup Constru has appealed to the Tel Aviv District Court for financial assistance, claiming that its funding has been impacted due to the ongoing judicial overhaul. Constru says that it ran into a "perfect storm", due to, among other things, "the growing concerns of investors to make investments in Israel in view of the approaching [judicial overhaul]."
According to the company, "a number of investors, including the leading investor in the current investment round, withdrew from their previous intention to invest in the company,” preventing Constru from completing the round of investment on time.
The District Court appointed an attorney to oversee the case, as well as a temporary trustee for the company who, at their request, issued a freeze preventing creditors from opening or continuing legal proceedings against Constru. The company currently has a debt of $4.5 million.
Constru develops and commercializes an AI platform for construction processes. It was established in 2017 and is held by a number of different owners, including VC funds that made investments in the company. The company has raised a total of about $19.5 million. The company is led by CEO and CO-Founder Michael Sasson and Co-Founder and Chief Construction Innovation Shalom Bellaish.
The company told the court that "among the company's clients are leading construction companies in Israel such as the Ashstrom Group (also a shareholder) and Y.H. Demari and leading construction companies in the US, Korea and Japan.”
Constru also said that it was caught up in “the turmoil rocking the Israeli high-tech industry…due to the global economic crisis, the collapse of banks abroad…and due to the growing fears of investors to invest In Israel.” The temporary trustee appointed by the court is currently working on a sale process for the company and is negotiating with potential bidders.
