There's something going around here,

What it is ain't exactly clear Outbrain, a company started in NY by Quigo co-founder, Yaron Galai, announced an expansion round of financing led by new investor, Israel based Carmel Ventures.

During the summer, NY based Payoneer, also received expansion funding led by Carmel. Last year, Greylock (Israel) led an expansion round for NY based WebCollage. Also, last year, Eyeblaster secured a $30mm expansion round from a group of Israel based technology investors.

With a dearth of exits that the general venture market has experienced, the venture capital market in Israel has been contracting for a number of years. But that's only part of the story. A few years ago, it was standard practice for young, Israel based companies, to receive initial funding from local VC's, then relocate to NY, Ca, or Boston while raising expansion funding from US investors. Now, however, a generation of US based (the above examples are even more specific to NY) Israeli's have successfully raised expansion funding from Israel based VC's that have shifted, at least some of their focus, to expansion stage investing and are deploying significant capital in the US.

Today, in Israel, non-native VC's account for more than 50% of the early stage funding activity. Great firms such as Greylock, Lightspeed, Benchmark, Canaan, and Sequoia, have paved the way for others.

I am sure that the natural movement up the lifecycle chain by Israeli VC's is both a defensive reaction to the success of non-Israeli investors in garnering significant market share, as well as an opportunistic move to leverage existing relationships.

Turning back to earlier stage transactions, we have seen Union Square and First Round involved in funding young Israel based (and other non-US) companies that are building presence in the NY area.

There was a time, interrupted by the Internet bubble, when the venture market was strictly segmented by stage and geography. The globalization of the internet opportunity, coupled with the democratization of IP knowledge seems to have broken down the limiting geographic walls in investing criteria. Time will tell how well stage agnostic investors will fare.