2013 set new records for investments in and exits by Israeli high-tech companies. A report by the IVC Research Center and SiSense, which has developed big data analytics technology, says that exits by Israeli high-tech companies totaled $6.64 billion in 2013.
Although the total for exits is far from the records set in 2006 and 2012, exits by venture capital-backed companies totaled $4.2 billion in 2013, a ten-year high, during which the average of exits was $2.2 billion. 2013 may have been the best year ever in Israel, if the Chromatis Networks deal in 2000 is excluded. Altogether, there were 80 exits by high-tech companies in 2013, of which 35 were by venture capital-back companies.
In ten years, exits by Israeli high-tech companies totaled $47 billion in almost 800 deals. The most prominent trend in 2013 was the large proportion of mid-sized and large sale transactions (i.e. more than $100 million) out of the total number of deals.
This trend, which indicates a level of maturity in the industry, and was accompanied by a drop in the number of exits for less than $10 million, contributed to the sharp increase in returns for venture capital funds, which benefited from last year's exits. According to IVC and SiSense's calculations, the funds' average return on equity was 5.3 in 2013, almost double the 10-year average of 2.91.
As for the big exits in 2014, IVC doubts that there will be many $1 billion-plus deals. "Deals like the Waze or Given Imaging Ltd. (Nasdaq: GIVN; TASE: GIVN) acquisitions are still few and far between, and that's unlikely to change anytime soon," says IVC Research Center CEO Koby Simana.
Published by Globes [online], Israel business news - www.globes-online.com - on January 6, 2014
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