48% of the respondents in the Deloitte Brightman Almagor Zohar VC Indicator survey, senior figures in the Israel venture capital community, believe that investment in venture capital funds will total more this year than last year.
Only 16% of those surveyed believe that the funds will raise less than they did last year, and only 8% see a worsening in the general economic situation.
45% of the respondents said that they thought foreign investment in Israel would grow. This response is evidently more than simply positive thinking by the Israeli venture capitalists, because Deloitte's global VC Indicator survey ranks Israel third, after China and Japan, as an investment destination.
Israel was ranked only twelfth, however, for the ability of its venture capital funds to raise money. In other words, foreign venture capital funds are prepared to invest money in Israel, but not necessarily in the local funds. Investors point to a degree of difficulty in raising money for venture-backed companies, particularly for round B, in which several millions dollars at least need to be raised as the start-up turns from a technology venture into an active company. 26% of those surveyed say that the difficulty in financing this round will lead companies to seek investors overseas.
At earlier stages too there is still a problem, and a sharp decline is predicted in preparedness to invest at the seed stage. Tal Chen CPA of Deloitte explains the sharp fall by the fact that many active funds are nearing their end, and so they prefer investing in mature companies, and not enough new funds have meanwhile been raised.
The survey also shows that the hottest segment is applications for mobile, with 67% of respondents mentioning "hype" in this field. Investors say they would like to see companies in energy storage and information infrastructures. In actual statistics, the number of hardware companies has declined considerably, but none of the respondents mentioned a lack of such companies.
Published by Globes [online], Israel business news - www.globes-online.com - on October 23, 2013
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