For more Information: Efrat Zakai, Director of Research: IVC Research Center 972 -3-640-2337 Efrat@ivc-online.com www.ivc-online.com
-FOR IMMEDIATE RELEASE-
Summary of Israeli High-Tech Company Capital Raising Q2 / H1 2008
IVC REPORTS: A SEVEN-YEAR RECORD; CAPITAL RAISED BY ISRAELI HIGH-TECH COMPANIES IN H1/08 REACHES $1.08 BILLION – UP 28% FROM H1/07
Israeli VC First and Seed investments are slowing
Tel Aviv, Israel, July 16, 2008. The following are the findings of the Quarterly Survey conducted by the IVC Research Center, which for more than nine years has been at the forefront of venture capital and private equity research in Israel. This Survey reviews capital raised by private Israeli high-tech companies from Israeli venture capital funds and from other investors. The Survey is based on reports from 80 venture investors of which 51 are Israeli management companies and 29 are other – mostly foreign – investment entities.
In the second quarter of 2008, 115 Israeli high-tech companies raised $465 million from venture investors – both local and foreign. The amount was up 7 percent from the second quarter of 2007, but was 25 percent below the unusually high first quarter of the year. In the first half of 2008, capital raised was $1.08 billion, up 28 percent from H1 2007 levels. “H1 figures were the highest since 2001 with Israeli high-tech investments reaching over $1 billion,” said Efrat Zakai, Director of Research at IVC, “Despite these records, First and Seed investment data suggest investments by Israeli VC funds are slowing. We therefore expect end-of-year capital raising figures to be only marginally higher than the four-year average of $1.6 billion.” The average financing round was $4.04 million, compared to $3.69 million in the second quarter of 2007 and $4.57 million in the first quarter of 2008. Seventy-eight companies attracted more than $1 million each. Of these, 17 companies raised $5 million to $10 million each, 13 companies raised $10 million to $20 million each, and 3 companies raised more than $20 million each. Israeli VC Investment Activity In the second quarter of 2008, Israeli VCs invested $161 million in Israeli companies, a decrease of 17 percent from second quarter of 2007 ($193 million) and 39 percent below Q1 levels of $262 million. In the first half of 2008 – benefiting from robust investment levels in the first quarter – Israeli VCs invested $423 million in Israeli companies, a 16 percent rise from the $364 million in H1 2007. The Israeli VC share of the total amount invested in Israeli high-tech was 35 percent in the second quarter and 39 percent in H1, with the remainder of capital coming from foreign investors as well as non-VC Israeli investors. First investments by Israeli VC funds were only 22 percent of their total investments in the second quarter and 35 percent in the first half, which compares to 38 percent and 44 percent in Q2 07 and H1 2007, respectively.
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Capital Raised by Companies The Communications sector led capital raising in H1 2008 with 26 percent of capital raised followed by Software with 22 percent, the Life Sciences with 17 percent and the Internet with 11 percent of total capital raised. Seed companies attracted 5 percent of capital raised in the first half of 2008, compared with 12 present in H1 2007 and 8 percent in H1 2006. Early Stage (R&D) companies captured 34 percent of capital raised, Mid-Stage companies (up to $10 million in revenues) 37 percent, and Late Stage companies 24 percent.
For more information: www.ivc-online.com
IVC Research Center is Israel’s leading research center providing business leaders with an unmatched wealth of data on Israeli venture capital, private equity and high-tech industries. IVC products and services are used regularly by venture capital funds, private investors, high-tech companies, financial investors and institutions, as well as public entities such as the Office of the Prime Minister, the Central Bureau of Statistics, the Bank of Israel and the Office of the Chief Scientist. IVC publishes the most comprehensive guide to Israeli venture capital and high technology companies – the IVC Yearbook. Among IVC products and publications are the Quarterly Survey, which examines capital raising trends by Israeli high-tech companies; the quarterly Israel Venture Capital Journal (IVCJ), which reviews developments in the venture capital, private equity and high-tech industries; and a comprehensive online database (www.ivc-online.com) containing over 6,000 Israeli high-tech companies, venture capital funds, investment companies and technology incubators, as well as news updates and lots more.
For additional information, please visit: www.ivc-online.com or contact Efrat Zakai, +972-3-640-2337, efrat@ivc-online.com
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