National Telephone company

Bezeq

has completed a $1million investment in ComfyNet, in return for a 17% stake in the firm. ComfyNet is a subsidiary of the Tel Aviv-traded

Comfy Interactive

.

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The investment was transacted at a company valuation of $5 million, before the money, or $5.9 million after the money.

Bezeq was given an option to increase its investment by another $526,000, in exchange for an additional 5% of the company's stock.

Bezeq's ComfyNet investment follows an earlier decision by its board to start directly investing a total of NIS 60 million in startups. The board determined that it would invest a maximum of up to NIS 20 million per startup.

Comfy develops and markets software and integrated hardware products for the family computer market, and especially for children. It is best known for its Comfy Keyboard, which did not succeed commercially. In 1997, ComfyNet went public, but before that it had raised NIS 100 million at a company valuation of NIS 320 million. After going public ComfyNet's share price quickly plunged and today the stock trades at a company valuation of $18 million.

ComfyNet also has real estate interests, as well as a stake in the car-rental company Avis.