The American venture capital group

Benchmark Capital

today announced that it has raised $220 million for its first Israeli fund.

Benchmark Israel will invest exclusively in Israeli startups. It will be managed out of Israel by general partners Mark Kremer, Arad Naveh and Nachman Shelef.

In addition to the institutional investors and Benchmark Capital's traditional private investors, the Israeli fund has raised capital from

Cisco Systems

(Nasdaq:CSCO),

Rational Software

(Nasdaq:RATL),

Mercury Interactive

(Nasdaq:MERQ), and

Infineon Technologies

(formerly Siemens Semconductor Group).

"Support for Benchmark Israel has been very strong," today said Mark Kremer. "Our limited partners have handed us a great vote of confidence in our vision and our model, and we are excited about the opportunities that lay ahead."

"The vibrant Israeli high-tech industry is second only to Silicon Valley. Working with Benchmark for the last five years, I am excited about what we can do together for both portfolio companies and investors," stated Rational Software Chairman Paul Levy.

Benchmark Israel will invest in early-stage companies that seem able to leverage the relative advantages of the Israeli tech industry, and which have the potential to suceed in the U.S.

The fund will adopt Benchmark Capital's investment strategies.

The new fund has to date invested in

Integra5

and

Lycium Networks

.

Ite key fields will include organizational applications, infrastructure systems and software, communications equipment and software, semiconductors and optical equipment.

Benchmark Capital was founded in 1995. It focuses on early-stage hi-tech. Its more notable investments to date include

Ariba

(Nasdaq:ARBA),

eBay

(Nasdaq:EBAY),

Juniper Networks

(Nasdaq:JNPR), Handspring,

Red Hat Software

(Nasdaq:RHAT), and

Handspring

. Benchmark Capital runs investments amounting to more than $2 billion.