Deloitte: Israel VC execs pessimistic about 2015

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36% expect things to get worse in January-June 2015; only 14% expect improvement.

36% of executives in the Israeli venture capital community believe that the economic situation will become worse in the coming two quarters, compared with only 14% who believe it will improve, according to a VC Indicator survey of dozens of executives and partners in venture capital funds in Israel published by the Deloitte Brightman Almagor Zohar accounting firm. The survey, conducted in December 2014, refers to expectations for 2015.

The figures are particularly disappointing when compared with the same survey in the first quarter of 2014, when 57% of the participants expected improvement in the economic situation.

The survey tried to distinguish between future venture capital investments according to the age of the companies, and found that most of the investors (64%) expected to focus on beginning companies in the seed stages during the coming year. This is twice the proportion as in the first quarter of 2014.

The participants also commented on the areas of investment likely to attract most of the investments in 2015. 43% of the respondent said that information security would be the leading field, followed by biotechnology and medical equipment. Contraction was expected in investments in clean tech and semiconductors.

Together with questions about the general economic climate, the participants were also asked to comments in detail on local high-tech companies that they believe would achieved substantial growth in 2015. The list included Taboola and Outbrain (which compete with each other, and both of which hope to hold IPOs in 2015), Uri Levine's FeeX, Moovit, and others.

Tal Chen, CPA, who leads Deloitte Brightman Almagor Zohar's Technology, Media, and Telecommunications Group, said, "In spite of the uncertainty about the continued growth of the Israeli economy, Israel stands out as a powerful development center for technological innovation that attracts growing interest from foreign companies and investors in general, and especially Chinese investors. Many industries around the world, such as the automotive production systems, and financial and trading systems and services industries, have now realized that they must integrate technological innovation in order to maintain their competitiveness. We see examples of this in the unprecedented interest by international companies looking for cooperation with Israeli technology companies."

Published by Globes [online], Israel business news - www.globes-online.com - on January 18, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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