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Q3 Israeli high-tech capital raising exceeds last three years average with USD701m

In the third quarter of 2014 170 Israeli high-tech companies attracted USD701 million, six per cent above the USD661 million of Q3/2013, but down 24 per cent from the exceptionally high USD928 million raised in the previous quarter.

According to a report from IVC Research Center and KPMG, the third quarter amount was 29 per cent above the USD545 million average of the last three years.
  
The average company financing round was USD4.12 million, compared to USD4.08 million in Q3/2013 and USD5.33 million in Q2/2014.
 
Koby Simana, CEO of IVC Research Center, says: We have been asked repeatedly about the effect of Operation Protective Edge on the local high-tech industry and on capital raising in particular.  Examining the data now, we are pleased to note that the Gaza conflict barely impacted high-tech capital raising. Traditionally, the third quarter tends to be the weakest for capital raising in any given year, but Q3/2014 ranked as the third best quarter ever, and one of the top three quarters in the past decade."
 
Ninety eight VC-backed deals in Q3/2014 accounted for USD476 million or 68 per cent of total capital invested. This was an improvement from 61 per cent in Q2/2014, and just short of the 70 per cent of Q3/2013.
 
In the first three quarters of 2014, 504 Israeli high-tech companies raised USD2.3 billion, just 1 per cent short of the USD2.33 billion raised in all of 2013, and 50 per cent more than the USD1.5 billion attracted in the Q1-Q3/2013 period.
 
"We’ve seen an increase of USD800 million in capital raising in the first three quarters of 2014 over the same period in 2013," says IVC’s Simana. "This increase is mostly explained by an upsurge in the number of large financing rounds above USD20 million and the accumulated capital generated by such deals. Some USD868 million was raised in deals above USD20 million in the first three quarters, an increase of more than 200 per cent from the USD276 million of the corresponding year-earlier period. Consequently, three quarters of the 2014 increase resulted from capital raised in deals above USD20 million.”
 
In Q1-Q3/2014, 282 VC-backed companies accounted for USD1.5 billion, more than that of any nine-month period in the last six years. This compares with USD1.2 billion raised in Q1-Q3/2013 and USD984 million in Q1-Q3/2012. 

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