MoneyTree: 46% drop in VC investment in Q3

Israeli venture capital-backed companies raised $198 million in the third quarter.

Israeli venture capital-backed companies raised $198 million in the third quarter of 2011, 46% less than the $364 million raised in the preceding quarter and 22% less than the $253 million raised in the corresponding quarter of 2010, according the MoneyTree Report for the third quarter, published by Kesselman & Kesselman pwc Israel.

44 companies raised capital in the third quarter, down from 76 companies in the corresponding quarter and 68 companies in the corresponding quarter. The average investment fell to $4.5 million in the third quarter from $4.8 million in the preceding quarter, but higher than the average investment of $3.7 million in the corresponding quarter.

$75 million was invested in five deals of more than $10 million each, down from the $227 million invested in 13 deals of more than $10 million in the preceding quarter, and $107 million invested in seven deals of more than $10 million in the corresponding quarter.

PwC Israel partner, High-Tech Assurance Practice, Rubi Suliman said, "After the steady growth in investment from the beginning of 2010 through the second quarter of 2011, during which $364 million was invested, investment in the Israeli high-tech market took a U-turn in the third quarter. The drop is partly due to the summer, when there is little investment activity, but the main reasons for the sharp drop is the difficulty of many funds in raising capital, the slowdown in global M&A activity, the US credit downgrade and its consequences, and the crisis in Europe."

Published by Globes [online], Israel business news - www.globes-online.com - on November 1, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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