Israeli high-tech start-ups raised the largest amount of capital in six years in 2007, even as the proportion invested by Israeli venture capital funds continued to decline, according the IVC Research Center 2007 survey.
Gemini Israel Funds was the most active Israeli venture capital fund in 2007, with 16 first investments, Vertex Venture Capital was in second place with eleven first investments, followed by Pitango Venture Capital, with nine; Giza Venture Capital with eight; Sequoia Capital with seven; and Benchmark Capital, Evergreen Venture Partners, Genesis Partners, and Greylock Partners, with six each.
462 Israeli high-tech companies raised $1.76 billion from local and foreign venture investors in 2007, 8.5% more than the $1.62 billion raised in 2006 and 31.5% more than in 2005. Israeli venture capital funds invested $678 million in Israeli high-tech companies in 2007, 39% of the total amount raised, compared with $651 million in 2006 (40%) and $655 million in 2005 (49%).
115 Israeli high-tech companies raised $503 million in the fourth quarter, the largest amount in five years, and included a more than $100 million financing round by MobileEye Inc.
Israeli venture capital funds invested $50 million in foreign start-ups in 2007.
IVC adds that Gemini was the most consistent seed investor, with eight seed investments. It was followed by Vertex with five, and Sequoia Israel with four. Gemini was also the most sector-focused fund, investing seven of its sixteen first investments in the Internet sector. Vertex concentrated its investments in two sectors, making five new investments in communications and five in software. Israel Cleantech Ventures Funds made five first cleantech investments in 2007, its vintage year.
Israel's top nine funds made 75 first investments altogether, including 32 in seed-stage companies. The Internet sector attracted the largest number of first investments with 26 deals (35%), followed by the semiconductor sector with 14 (19%). Communications start-ups raised $371 million (21% of total capital raised); followed by life sciences start-ups with $351 million.
IVC CEO Guy Holtzman noted, “Some funds have special pre-seed platforms and vehicles. These include Gemini with Lightspeed Gemini Internet Lab ; Vertex with Technion Entrepreneurial Incubator Co. Ltd. (TEIC), Pitango and Evergreen with Precede Technologies, Giza with Yozmot Granot Initiative Center; and Gemini and Evergreen, with Startup Factory. The programs are characterized by small initial investments per deal that increase over time if the company progresses well. While our ranking reflects the number of deals and not capital invested, it does give an interesting indication of the current state of VC activity.”
The most active venture capital fund is based on the number of first investments in Israeli, Israel-related and foreign high-tech companies. Data are from the IVC Online database and information received directly from the funds.
Published by Globes [online], Israel business news - www.globes-online.com - on February 13, 2008
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