Dun & Bradstreet Israel published its 2010 rankings of venture capital firms yesterday. The rankings are based on the amount of capital managed. There are no major changes in the rankings, given that funds raised little capital in 2009.
However, the surprise in the report is Dun & Bradstreet Israel's forecast for 2010. It predicts that this year will be fundamentally different from last year. How the year will look in terms of venture capital investment in start-ups depends on who you ask.
Dun & Bradstreet Israel is extraordinarily optimistic. For 2009, it predicted that investment would fall to half the level of 2008; now it predicts that investment will double and "return to the levels of 2006-07." In other words, it predicts $1.5 billion in venture capital investment by Israeli funds in 2010.
In contrast, both the Kesselman and Kesselman - PricewaterhouseCooper Israel MoneyTree report for the fourth quarter of 2009 and the Israel Venture Association are not as optimistic.
Dun & Bradstreet Israel says, "The more moderate scenario indicates a 40% increase in investment to $1 billion."
According to Dun & Bradstreet Israel, Pitango Venture Capital is Israel's largest venture capital fund. The only change in the top ten rankings is Sequoia Capital's rise to seventh place, after it raised a new $200 million fund slated for the Israeli market, and Israel Infinity Venture Capital's drop in the rankings..
Dun & Bradstreet Israel estimates that Israeli venture capital funds invested $20 billion in Israeli start-ups over the past decade.
Dun & Bradstreet Israel does not consider investments by firms, or their activity, but only considers the amount of capital raised by each firm since it was founded. The result is somewhat irrelevant when it comes to the contemporary Israeli high-tech scene, since, over time, portfolio companies can hold IPOs or be bought.
An example of this is second place Star Ventures, with NIS 3.8 billion under management, but which has been inactive for years. Dun & Bradstreet Israel puts an asterisk next to Star Ventures, and says that the firm "plans to raise a new fund in 2010". Dun & Bradstreet Israel did not say exactly what it means by this, but Star Ventures may expand its capital base in the coming months.
Published by Globes [online], Israel business news - www.globes-online.com - on February 11, 2010
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