1,500 Israeli start-ups closed in the past three years and scores more will close in the near future unless they obtain financing, Israel Export Institute start-up division public board chairman Dr. Avi Messica said yesterday.
Messica said cutting the Export Institute's export marketing encouragement fund was "almost a death blow for start-ups in Israel."
He added, however, "The Israeli start-ups that survive this year will have a chance to succeed," and predicted a recovery in 2004.
In an interview with the Export Institute's magazine, published yesterday, Messica claimed that 1,500 remaining start-ups were having trouble raising capital and finding strategic partnerships.
Commenting on the search for strategic partnerships, Messica said the Export Institute was organizing delegations to go abroad and was bringing representatives of foreign companies to Israel to meet with selected Israeli start ups.
Messica said his prediction of economic recovery in 2004 was based on macroeconomic indicators, including US GDP, which has grown by 3-4% in recent quarters; a partial revival on Nasdaq; and the return of foreign capital to the US stock market.
He cautioned that the circumstances of venture capital funds were still problematic, but "they'll begin to move after Nasdaq IPOs recover."
Messica thought there was a 6-12-month lag between the recovery of the US stock market and the beginning of large-scale investment by venture capital funds. He said the companies that survive the coming year and have good technology and initial products would be very well placed toward 2004-05.
Published by Globes [online] - www.globes.co.il - on August 6, 2003