According to the PwC Israel report on tech exits for 2020, there were far fewer deals, only 60 compared with 80 in 2019, but their cumulative value rose 55% to $15.4 billion, from $9.9 billion in 2019.
PwC Israel noted that the average deal size increased by 207% to $257 million (excluding follow-on deals in both years).
PwC Israel said that 2020 was a record for IPOs with 19 IPO, up from 13 in 2019. In addition, the share of IPOs in the total value of deals surged to $9.3 billion (or 60% of total deal value), compared with $2.2 billion in 2019 (or 22% of total deal value). The average value per IPO also rose sharply from $169 million in 2019 to $489 million in 2020, mainly led by Lemonade, JFrog and Nanox in the US, and Ecoppia and Aquarius Engines in Israel.
The share of large deals remained high in 2020, PwC Israel added. There were six deals larger than $500 million (total value of $9.4 billion) compared with 4 such deals in 2019 (total value of $3.7 billion). There were 24 deals of over-$100 million in 2020, the same number as 2019.
The computing and software sector continued to lead the exits, with total value of deals reaching $7.4 billion. Other sectors, which showed significant growth included the Internet and life sciences sectors.
PwC Israel partner and head of Hi-Tech Cluster Yaron Weizenbluth said, "While we were used in recent years to see a diverse mix of multiple verticals seeking to acquire Israeli technology companies, most went to the sidelines in 2020, again leaving the field for tech giants. The testing times underscored the need for deeper and more advanced technologies and solutions, and combined with more seasoned entrepreneurs and management teams, the eventual outcome was impressive by any standard."
He added, "The biggest story this year is without a doubt the comeback of tech companies in the IPO market. The end of 2020 would probably have been different without the surge in the number and value of IPOs by Israeli tech companies in the US and Israel. The resurgence of tech companies in the equity market has several reasons. Low interest rate, a larger monetary base, more government incentives and other capital directed to tech companies, and even a psychological shift in the Israeli capital market that make investors gravitate more towards tech are all plausible factors that may have generated this friendly environment for IPOs and value creation. Clearly, Israeli entrepreneurs did not miss out on that opportunity."
Published by Globes, Israel business news - en.globes.co.il - on December 22, 2020
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