Big Tech 50 reveals sharp falls in Israeli startup valuations

Deflated unicorn credit: Shutterstock
Deflated unicorn credit: Shutterstock

The Israeli R&D partnership has reported to the TASE that 10 of the 14 startups in which it has invested have seen their valuations decline.

The valuation of Israeli startup Orcam, which was founded by Prof. Amnon Shashua and Ziv Aviram, slumped 82% between July 2021 and December 2023, according to a report to the Tel Aviv Stock Exchange (TASE) by R&D partnership Big Tech 50 (TASE: BIGT), which revealed its holdings in 14 Israeli tech companies in which it has invested.

Orcam is one of 10 companies which have seen their valuation fall since 2021, according to Big Tech 50. These include fintech companies for small businesses Fundbox and BlueVine, which have seen their valuations fall by 76% and 37% respectively. The valuations of AI investigation platform Voyager Labs and smart imaging for retail platform Trax have fallen by 69% and 61% respectively since 2021, while Buildots, which has developed tools for monitoring construction processes for real estate companies, has seen its valuation cut by 50%.

BigTech 50 has also reported that two companies saw their valuations remain unchanged - smart transport company Via and US cybersecurity company Human. Two others companies - content company Open Web and insurtech company At Bay have seen their valuations increase modestly since 2021.

BigTech 50 only has small holdings in each startup - 1% on average - and its ability to see the financial books of each company it has invested in and estimate its valuation is limited. Even so its evaluation of its assets does provide an insight into what is happening in Israel's privately held tech companies.

A fall of $1.6 billion in two years

Big Tech 50 invested $2 million in Orcam in July 2021 for less than 1% of its shares, reflecting a valuation of just $363 million by its calculations. The R&D partnership also reveals that Orcam has estimated annual revenue of $67 million. Orcam is a private company and therefore its valuation is not set unless it sells shares in a secondary deal or raises money in a new financing round. In the event that such deals do not happen, investors can estimate the valuation of a company at their own discretion. Consequently, Big Tech 50's estimates do not necessarily represent the valuation given by a company's management or other investors.

However, these valuations do represent a negative momentum in the life of the company. According to a report by "Calcalist," later in 2021 Orcam was set to raise $50 million at a valuation of $1.5 billion in a financing round led by Leumi Partners, Harel and Clal Insurance, although the round was never completed.

In February, "Globes" reported that Orcam has laid off 50 employees and transferred several dozen others to a new subsidiary, which will develop devices to assist those with hearing impairments, while Orcam itself will continue to focus on devices for visual impairments. It is possible that the loss-making activity of the hearing products weighed on Orcam's ability to show growth and realize the desire of its founders to hol;d an IPO

Another dramatic reduction in the valuation of a Big Tech 50 holding has taken place at AI transcription and captioning Verbit, which recently underwent an upheaval when CEO and cofounder Tom Livne stood down. Big Tech 50 says it cut the valuation of its investment in Verbit by 50%.

The bottom line is that Big Tech 50 cut the valuations of its holdings in startups by an overall 32.6% since it began investing in 2021-2022.

Published by Globes, Israel business news - - on April 9, 2024.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.

Deflated unicorn credit: Shutterstock
Deflated unicorn credit: Shutterstock
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