Israeli startup Constru blames investors pulling out on the government's judicial legislation after falling $4.5 million in debt.
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Constru is a hi-tech company that provides an AI-powered construction solution that turns captured imagery into insights for better data-driven decision-making.
The startup sought out court assistance and said it got caught in a "perfect storm," partially due to "the growing concerns of investors to invest in Israel due to the nearing judicial reform/overhaul.
"In light of this, a number of investors withdrew, among them the leading investor in the current investment round in the company," Constru said.
Constru, a private company that was established in 2017, was funded by a number of different stakeholders. The total investments in the company amount to approximately $19.5 million.
After finding itself in a $4.5 million-deep hole, the company's lawyers in March requested a freezing order, which prohibits a company from disposing of or transferring its assets. Freezing orders are typically used in cases where there is a risk that the assets will be hidden or removed before a judgment can be made in a legal dispute.
"The company got caught in a perfect storm in light of the ongoing turmoil that has plagued the Israeli hi-tech industry, domestically and abroad, as well as because of the global economic crisis, the collapse of banks abroad that hurt the wide investing public, and also due to growing concerns of investors to make investments in Israel," one of the lawyers stated in their appeal.