IVC said the rankings were based on the number of First Investments during 2000-2003 in Israeli and Israel-related companies (excluding follow-on investments), and distinguish between investments made with Israeli VC participation in the same or earlier financing round and investments that did not include participation of an Israeli VC. All data were derived from the IVC-Online Database (www.ivc-online.com) and from information received directly from the investors.
Intel top
Corporate investor Intel tops the list, having made 35 First investments during 2000-2003. Intel Capital is the largest CVC in the world and has investment representatives in Israel who oversee local investments. JP Morgan, Goldman Sachs, Shamrock Holdings and Deutsche Bank trailed Intel with 16,15,12 and 10 First investments, respectively. Of note, is that JP Morgan, Goldman and Deutsche Bank investments were made during 2000-2001 after which activity was limited to follow-on investments.
In addition to Intel, leading foreign corporations that maintain local investment representation include Applied Materials, Johnson & Johnson, Motorola,, Nokia and Philips. Active corporations without local representation include Siemens, Samsung, Nortel Networks among others.
Investors that increased activity in 2002-2003 include Accel (7 First investments), CDIB (5), West Steag (5), Lightspeed (4) and Hitachi (4). US-based Advent, although not ranked among the most active investors for the four-year period, made three First investments in 2003.
Benchmark and Sequoia operate direct investment funds in Israel, and Alice Ventures and Partech have representative offices in Israel. Additional detail about all VC funds can be found in The Most Active VC Funds Report for 2003 published by IVC at: www.ivc-online.com/maf2003.asp.
Unique characteristic
Foreign investors made 288 First investments in 2000-2003, 241 (84%) of which were made with participation of Israeli VCs at the same or earlier financing round. Only 47 investments (16%) were without Israeli VC participation. This demonstrates that foreign investors prefer to invest together with Israeli VCs or join a financing round in Israeli VC-backed companies.
According to Zeev Holtzman, Chairman of Giza Venture Capital and IVC: “Foreign investors are expanding their activity in Israel and prefer to invest with local VC funds. This cooperation is one of the unique characteristics of the Israeli VC industry compared to the rest of the world. It reflects the attractiveness of Israel as the most important resource of innovative technologies after North America.”
Mostly from US
Most of the 24 active foreign investors in Israel are located in the US. Six investors are from Asia and five are European. Jafco (Japan) ranked highest among Asian investors (though it is no longer making new investments in Israel), and Holland Ventures (Holland) is the most active European investor. Accel Partners (US) invests in Israeli companies through its London-based office.
Communications leads
During 2000-2003, 197 Israeli and Israel-related companies received First investments from foreign investors. Ninety-five companies (48%) were in the Communications sector, 56 (29 percent) in Enterprise & IT Software, 18 (9%) Internet, 14 (7%) in the Life Sciences and 14 (7%) in other sectors
Spring visitors
Foreign investors are expected to increase their investment activity in Israel in 2004. Several important delegations of overseas investors are expected to visit Israel in the next coming months. The Tech Tour, which includes 40 overseas companies and investors, is making its first foray outside of Europe in late March. “Tech Tourists” include representatives of Silicon Valley Bank, Lightspeed Venture Partners, Nokia, Marubeni Corp., Highland Capital Partners, Siemens VC and other leading corporations and VC funds.
The VC Mission to Israel, a delegation organized by the California Israel Chamber of Commerce (CICC), is expected to arrive in Israel in March and include 25 top-tier US VCs to explore business opportunities. These include Bessemer Ventures, Kodiak Ventures, Accel Partners and Blumberg Capital.
Published by Globes [online] - www.globes.co.il - on March 8, 2004