Israeli venture capital funding hits decade low

Total VC funding was 12% less than the corresponding quarter.

According to the Israel Venture Capital Research Center (IVC), Israeli start-ups raised $234 million in the first quarter of 2010 from local and foreign VC investors. The amount was the lowest quarterly amount raised in the last five years. It was 12% below the amount raised by 93 companies in the corresponding quarter of 2009.

In the first quarter, Israeli VC funds invested $78 million in Israeli companies, which is the lowest quarterly amount in the last decade. The figure was 26% lower than the first quarter of 2009.

IVC Research Center CEO Koby Simana said, "The decrease in the number of active Israeli VC funds and a reduced amount of capital available for investments, were the main reasons for the decline in capital raising. Unfortunately, we don’t expect any dramatic improvement in the next few quarters.”

54 companies attracted more than $1 million each. Of these, nine companies raised $5 million to $10 million each and five companies raised more than $10 million. The average financing round was $2.57 million, compared to $2.22 million in the previous quarter and $2.85 million in the first quarter of 2009.

The Israeli VC fund share of the total amount invested in Israeli high-tech companies was 33%, and the remainder of capital came from foreign investors as well as non-VC Israeli investors.

The life sciences sector led capital raising in the first quarter with $86 million or 37% of capital raised, followed by the software sector with $32 million (14%), and semiconductors with $31 million (13%). Eleven seed companies attracted $11 million, 5% of the total amount raised in the quarter.

Published by Globes [online], Israel business news - - on April 21, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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