Menara Ventures 2025: The Discount Is Deep, but the Value Still Has to Turn into Cash

Getting to Know the Company

Menara Ventures is no longer an R&D partnership looking for the next investment. Since May 2023 it has been operating under a Run Off plan, which means no new investments and a full focus on improving, selling and distributing the proceeds from the existing holdings. So the right way to read 2025 is not as another small venture portfolio update. The economics of the partnership now depend on one thing: whether marked private holdings can actually become cash.

What is working now is not hard to see. At the partnership level, the balance sheet is relatively clean. At the end of 2025 Menara had NIS 4.4 million of cash, NIS 25.2 million of portfolio fair value, just NIS 1.7 million of liabilities, and NIS 28.0 million of partners' equity. The general partner also waived management fees and capital-raising fees during the Run Off period, and the partnership already proved in 2024 that at least one exit can become a real distribution, when it paid NIS 11.85 million to unit holders after the Reviews realization.

But this is still not a clean story. The 2025 net loss of NIS 4.36 million was not caused by a collapse across the entire portfolio. It came mainly from a NIS 3.96 million fair-value decline in the investments, with Matics alone accounting for NIS 3.58 million of that. At the same time, the shekel appreciated by about 12.5% against the US dollar, and because the target investments are measured in dollars, FX also weighed on the reported marks. In other words, 2025 was a year in which the paper marks weakened, but the deeper problem is more structural: even if the marks recover, the path from value creation to cash for unit holders still runs through exits, a payment waterfall, and a time horizon that has already been extended.

That is also the best explanation for the extreme gap between the books and the trading screen. Based on the last unit price and the number of units outstanding, Menara's implied market value is only about NIS 7.4 million. That is roughly one quarter of year-end equity. You can read that as an attractive discount. You can also read it as a warning. The market is effectively saying that NIS 28 million of equity in a vehicle like this is not worth NIS 28 million to the common unit holder as long as most of it sits inside level-3 marks rather than in the cash account.

The active bottleneck is value access, not value existence. Pairzon has about 90 paying customers, LeO ended the year with about 850 customers, Sensaps expanded into major ERP integrations, and even after the large Matics markdown the partnership still held four active portfolio companies. But a Run Off partnership is not judged like a normal software company. It is judged on a narrower question: how much of that value can turn into a deal, when, and under what terms.

This chart sharpens the risk immediately. Pairzon and Sensaps alone account for about 67% of the portfolio's fair value. So even though the partnership technically holds four active companies, the real thesis is concentrated in two holdings, and to a meaningful extent also in whether Matics stops being a pressure point.

Events and Triggers

The Run Off extension says two opposite things at once

Trigger one: on March 26, 2026, the audit committee and the board decided to extend the Run Off plan for another three years, subject to general-meeting approval. That is a material event because the original plan was approved in May 2023 and built around an approximately three-year realization window. The need for an extension means the realizations did not happen as quickly as hoped.

On one hand, that is clearly negative. If a three-year window did not produce enough exits, the market is entitled to ask whether the portfolio marks are really close to monetization. On the other hand, the extension also reduces the risk of a forced sale. Without an extension, the fallback route would have been a tender process for the unrealized investments. So the market may read the extension both as a sign of slippage on timing and as a move that avoids destroying value through time pressure.

2025 was really a re-pricing year

Trigger two: the 2025 markdown was not evenly spread across the portfolio. It was concentrated almost entirely in Matics. That point matters because without Matics, the picture looks very different. Pairzon fell by only NIS 182 thousand, LeO fell by NIS 297 thousand, and Sensaps actually rose by NIS 100 thousand. Matics alone accounted for a NIS 3.581 million decline.

This chart prevents a common mistake. 2025 was not a year in which the entire portfolio weakened across the board. It was a year in which the weakest holding, Matics, forced a broad re-pricing of the Menara story, and that move was amplified by a stronger shekel.

The incentive structure was moved closer to actual monetization

Trigger three: the Run Off plan did more than cut expenses. It also changed the success-fee mechanism. The general partner is no longer rewarded off unrealized positive marks. In practice, no success fee is paid until cumulative realization proceeds cover the cumulative direct cost of the unrealized investments. Only after that threshold is cleared does the fee begin at 20%, and only above a 100% profit over cumulative cost does it step up to 30%.

That is important because it aligns the general partner more closely with the unit holder. Value on paper is no longer enough. What matters is a real realization that first covers the remaining cost base of the portfolio.

The expense savings are real, but they are not a substitute for an exit

Trigger four: under the Run Off plan the general partner waived management fees and capital-raising fees, and the partnership estimated total annual savings of about NIS 2 million, including roughly NIS 900 thousand from lower executive and operating costs.

That helps, and the financial statements show it. General and administrative expense was NIS 1.339 million in 2025, and operating cash burn at the partnership level was NIS 1.308 million. So there is no wild cash leakage at the listed-vehicle level. But the blunt truth still matters: savings of NIS 2 million a year do not solve a roughly NIS 20 million discount to equity on their own. They only buy time.

There are capital signals inside the portfolio too

Trigger five: in May 2025 the partnership updated that Sensaps had raised USD 690 thousand in a SAFE round and was expanding the round by another USD 1 million. Menara chose not to participate. This is not a technical footnote. It is a reminder that upside in the portfolio can come with dilution, and that a Run Off partnership may repeatedly face a choice between preserving ownership and avoiding additional capital injections.

Efficiency, Profitability and Competition

In a Run Off partnership, "efficiency" and "profitability" do not really sit at the listed-company level. They sit inside portfolio quality and valuation quality. So the key 2025 question is not whether Menara grew revenue. It is whether the assets became easier to monetize or harder.

What really happened inside the four holdings

This chart shows the split inside the portfolio. Pairzon and Sensaps are still marked above cost. Matics and LeO are below cost. So the portfolio cannot be discussed as one smooth block. There are two holdings that still carry meaningful positive optionality, and two where the internal pricing has already turned more cautious.

Matics is the main problem, not only because it is weak, but because it can consume time and capital

Matics is the holding that turned from upside option into a funding question. According to the disclosure, the company generated more than USD 1.5 million of revenue in both 2024 and 2025, but monthly cash burn in 2025 was about USD 160 thousand, R&D spend was about USD 1.8 million, and year-end cash stood at only about USD 70 thousand. Matics itself estimates that it will need additional funding within 12 months of the report date.

And the pressure does not stop there. The Matics valuation is based on an ARR multiple of 2.73 on ARR of USD 3.033 million. But the same valuation also says ARR growth in 2025 was negative 12.8%. On top of that sits about USD 500 thousand of financial debt, a new bank facility of up to NIS 3.8 million, a floating charge and an IP charge, and a personal guarantee of up to USD 500 thousand from chairman Eldad Weiss. In exchange, he received share-purchase undertakings on favorable terms if the guarantee remains in place or is realized.

This is the core risk. The holding was not just marked down. It may also keep generating financing and dilution events before it ever becomes monetizable.

Pairzon still looks like the best asset in the portfolio, but its mark also asks for a lot of belief

Pairzon looks stronger operationally. According to the disclosure, it has about 90 paying customers, no single-customer dependence, US and European activity, roughly USD 800 thousand of cash at year-end 2025, a burn rate of about USD 40 thousand a month, and a runway of about 20 months. That is a very different profile from Matics.

But the valuation still needs to be handled carefully. Menara's Pairzon mark, NIS 8.878 million, is based on a DCF with a 23% WACC and 106% volatility. The forecast inside the valuation assumes revenue of USD 3.182 million in 2026, USD 10.187 million in 2027, and about USD 41 million in 2031. That is a sharp ramp. It may be possible for an early software company, but it also means a large part of the mark does not rest on the current year. It rests on a future scaling path.

There is also a legal layer. Pairzon has faced a NIS 2.5 million lawsuit since 2022 from Vizmo Technologies over alleged use of trade secrets and IP. As of the report date, written summaries had not yet been filed, and Pairzon estimated, based on legal advisers, that the chance of the claim succeeding was below 50%. That does not mean the case is likely to break the company, but it does mean the partnership's largest holding still carries legal uncertainty alongside its commercial promise.

LeO and Sensaps are why the story should not be read through Matics alone

LeO and Sensaps are the main reason it would be too simplistic to read Menara only through the Matics markdown. LeO ended 2025 with about 850 customers, deepened its AgencyZoom integration, built more insurance-network partnerships, and late in the year began selling a bulk-data format, with a first deal of about USD 50 thousand signed in December. Sensaps, meanwhile, expanded in 2025 through integrations with Microsoft D365, Oracle NetSuite and additional payment and distribution systems, while also holding PCI DSS and SOC2 compliance layers.

Even here, though, commercial progress is not the same as accessible value. Sensaps is marked on a 13.04 ARR multiple over USD 1.877 million of ARR and USD 686 thousand of cash, with a four-year liquidity horizon. That is a rich multiple. LeO is progressing, but its mark is still below cost. So the portfolio is not broken, but it has also not yet crossed from "working products" into "clear monetization path."

Cash Flow, Debt and Capital Structure

This has to be read through an all-in cash flexibility lens, not through a normalized cash-generation lens. The reason is simple: the thesis in Menara is not about recurring cash generation from an operating business. It is about how much cash is actually left and accessible on the way to distribution.

At the partnership level, 2025 does not look especially stressed. Operating cash flow was negative NIS 1.308 million, money-market income was NIS 214 thousand, there was no financing cash flow, and cash fell from NIS 5.496 million to NIS 4.402 million. There is no immediate funding hole here. In fact, for a small Run Off partnership the burn rate is fairly contained.

But that is not the whole picture. Once the distribution waterfall comes into view, unit holders realize that not every shekel of realization goes straight to them.

The path from exit proceeds to the common unit holder is longer than it looks

Under the plan, sale proceeds do not go directly into a distribution. First come operating expenses. Then comes repayment of the qualifying loan and any continuation loan if one was used. Then the success-fee mechanism is tested. After that, the partnership may still use cash for partnership needs, existing investment options, or preemptive rights. Only then can 80% of the residual cash be distributed.

The partnership also said explicitly that without equity raising and or the qualifying loan together with expense cuts, it would have struggled to meet its obligations in the foreseeable future. By the report date, the qualifying loan of NIS 585 thousand had already been repaid. That is positive. But the principle remains: there is a real gap between value created inside a holding and value that becomes accessible to the common unit holder.

The balance sheet is clean, but that does not mean the discount must close

This is a very important point. In many holding vehicles, the discount is explained by heavy solo debt. That is not the case here. Menara ended 2025 with just NIS 1.7 million of liabilities and no meaningful public or bank debt structure at the partnership level. So the Menara discount is not a discount driven by parent-level leverage stress. It is a discount driven by valuation quality, concentration, time, monetization certainty, and how much of the value can actually reach common holders.

This chart explains both why Menara looks cheap and why the market still refuses to trust it. If there were heavy solo debt, the explanation would be simple. When there is no large debt burden and the unit still trades at roughly one quarter of equity, the market is clearly questioning the marks, the timing of exits, and the quality of the route from realization to distribution.

There is also a positive cash point

The partnership is not standing with its back to the wall. It ended 2025 with NIS 4.4 million of cash, and against operating cash burn of NIS 1.308 million, that provides some room even without an immediate realization. That does not make the story easy, but it does mean the Run Off extension is not being requested out of near-term liquidity distress. It is being requested because private technology holdings are hard to monetize on a forced timeline.

Guidance and Forward View

Before looking ahead, four non-obvious findings need to stay on screen:

1. Menara's problem is not only the markdown. It is also the fact that the original realization window was no longer enough.
2. Matics has moved from optional upside to a funding risk, which means it now affects both valuation and timing.
3. Pairzon and Sensaps still carry most of the value, but both depend on forward-looking valuation assumptions rather than cash inside Menara today.
4. At the partnership level there is no acute debt pressure, so the next thesis-changing event has to come from the holdings, not from the listed vehicle's own balance sheet.

The right name for 2026 to 2028 is a monetization proof period, not a breakout period. Menara is no longer supposed to surprise with new investments or portfolio expansion. It is supposed to prove that the existing holdings can move from marked value toward a transaction.

What has to happen over the next 2 to 4 quarters

The first thing is an extension approval that does not cost market confidence. If the extension is approved, the market will only tolerate the longer timeline if it also sees real progress in one of the key holdings. An extension without progress will be read as delay for delay's sake.

The second thing is removing the funding question around Matics. That does not require an immediate exit, but it does require a financing or commercialization outcome that does not come at the cost of another major value hit. If Matics is forced to raise on weak terms, the market will start asking what the other marks are really worth as well.

The third thing is turning the commercial progress in Pairzon, LeO and Sensaps into something that looks like pre-exit rather than pre-round. Pairzon needs to show that the modeled ramp is more than a plan. LeO needs broader channel conversion and bulk-data traction. Sensaps needs to show that integrations and partnerships are becoming a revenue base that can justify the multiple.

The fourth thing is one transaction that turns the discount from a debate into a number. As long as there is no meaningful realization, the market can argue endlessly about fair value. The moment there is a real transaction, even a partial one, the argument becomes concrete.

How the market is likely to read the near term

In the short term, the market may read the Run Off extension in two directions. Positively, if it is seen as a way to avoid a forced sale. Negatively, if it is seen as an admission that the portfolio is farther from monetization than initially presented.

At the same time, every portfolio-company financing event is likely to carry more weight than its cash size. A weak Matics round, another Sensaps financing that dilutes Menara, or an internal-style event around Pairzon would not remain isolated footnotes. They would become live tests of valuation quality across the portfolio.

Risks

The portfolio is too concentrated in two holdings

Pairzon and Sensaps make up about 67% of the portfolio. That means even if LeO continues to progress and even if Matics stabilizes, a positive thesis on Menara still has to pass through one of those two larger holdings. In a small holding vehicle, that level of concentration can preserve a discount for a long time.

The biggest risk is another round, not just another markdown

It is easy to focus on the 2025 fair-value decline, but the more material risk is future financing at the portfolio-company level. Matics already estimates it will need additional funding within 12 months. In Sensaps, Menara already chose not to participate in a 2025 SAFE round. So the risk is not only that an appraiser writes a lower number. It is that portfolio companies raise capital on terms that make the value erosion real.

Part of the value rests on fairly long-dated assumptions

In Pairzon, a NIS 8.878 million mark is supported by a model that reaches roughly USD 10.2 million of revenue in 2027 and roughly USD 41 million in 2031. In Sensaps, a NIS 8.124 million mark rests on a 13.04 ARR multiple. Those numbers are not impossible, but they do require a relatively clean execution path. Any meaningful stumble in commercialization, fundraising or market conditions can hit value directly.

FX and legal uncertainty are still in the background

The investments are measured in dollars, so a stronger shekel weighs on reported value. That is not just accounting noise, because the listed vehicle itself trades in shekels. Pairzon also carries a legal overhang in the form of a NIS 2.5 million lawsuit. The company estimates the chance of success for the claim at below 50%, but the matter is not yet closed.

Even after the extension, time remains an enemy

A Run Off partnership is supposed to move toward less uncertainty over time. In Menara, 2025 showed the opposite as well. There is no immediate liquidity crisis at the listed-vehicle level, but there is a longer timetable, a major Matics markdown, and clearer evidence that exiting the portfolio will take longer than planned. So time here is not only a resource. It is also a source of risk, because every additional quarter opens the door to another round, another dilution event, or another re-pricing.

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Conclusions

Menara Ventures exits 2025 with a portfolio that still holds real value, with a relatively clean listed-level balance sheet, and with an extremely deep discount to equity. But this is not a simple case of "the market is wrong." The market is pricing a real difficulty: the value exists, but the route from that value to the common unit holder is still unproven.

Current thesis: Menara looks cheap against book equity, but until real realizations appear, the discount will remain at least partly justified.

What changed versus the Menara story at the start of the Run Off? Back then, the focus could still sit mainly on the existence of a digital portfolio and on the Reviews distribution. After 2025, the discussion has moved to a tougher and more mature place: which part of the portfolio is truly realizable, how much more capital may still be needed on the way, and whether the extension is a bridge to exit or a sign of prolonged delay.

The strongest counter-thesis says the market is too harsh. The partnership has no heavy solo debt, it already completed one real distribution in 2024, Pairzon and Sensaps are still marked above cost, and LeO is making commercial progress. If one reasonable realization happens, the entire reading could change quickly. That is a serious argument. The problem is that it still depends on an event that has not yet happened.

What could change the market reading in the short to medium term? First and foremost, a realization, even a partial one, in Pairzon or Sensaps. After that, a non-destructive financing event in Matics or a stronger commercialization step in LeO. On the other side, another weak capital round in one of the key holdings could deepen the sense that the reported value remains theoretical.

That is the real Menara hurdle over the next 2 to 4 quarters. For the thesis to improve, the partnership has to show that the Run Off extension moves it closer to monetization rather than merely pushing the pressure clock outward, that Matics stops being a funding sink, and that one of the major holdings moves toward a transaction that can be measured in cash. If that does not happen, the discount is likely to remain deep even without heavy debt, simply because the market will keep treating the value as conditional rather than accessible.