The latest Money Tree venture capital survey, published today by Kesselman & Kesselman/ PricewaterhouseCoopers, shows a substantial increase in venture capital-based high-tech investment (defined as investment rounds that include at least one venture capital fund). Both the amount of money raised and the number of deals rose in the first quarter of 2004.
The survey found that high-tech companies had raised at least $255 million in the first quarter, up 33%, compared with $192 million in the preceding quarter, and up 78%, compared with the $1443 million in the first quarter of 2003. 82 companies obtained financing in the first quarter, compared with 74 in the fourth quarter of 2003, and 60 in the first quarter of 2003. The survey reported that the average investment in the first quarter was $3.1 million, compared with $2.6 million in the preceding quarter.
Kesselman and Kesselman - PricewaterhouseCoopers Israel partner and high-tech practice leader Joseph Fellus said that the survey confirmed the prevailing positive mood in the venture capital industry, based on negotiations for raising follow-on funds conducted by some funds with investment concerns. Public issues for companies backed by venture capital funds are also being discussed. Assessments are that this optimism will persist, given the renewed interest by overseas players in the Israeli high-tech market.
Fellus added that for the first time since 2000, software holds the lead in investments in Israeli high tech, similar to the situation in the US. An April 27 Money Tree survey indicated that software had regained its position as the leading individual sector in the US in the first quarter, after having been overtaken by biotechnology in the two preceding quarters.
Published by Globes [online] - www.globes.co.il - on May 9, 2004