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With 150 active funds and over $10 billion under management, Israel’s venture capital industry thrives like in no other country. In 2005, foreign funds committed over 50% of the total dollars invested, demonstrating that Israel is an internationally sought after and sound investment.

In the first quarter of 2006, 101 Israeli high-tech companies raised $360 million from venture investors – both local and foreign. The amount was up 36 percent from the $264 million raised by 88 companies in the previous quarter, and three percent ahead of the $350 million raised in the first quarter of 2005 by 102 companies.



Read more for Q1 2006 Investments


Most Active Israeli VC Funds of 2005

Pitango and Star topped the list of most active funds with 11 First investments each. Pitango, which concluded raising $300 million for its fourth fund in 2004, increased its investment activity in 2005. Star also made 11 First investments, although five were in foreign companies. JVP and Sequoia each had eight first investments. Five of JVP’s investments were in companies operating in JVP Studio, JVP’s managed incubator, while Sequoia made three investments from its new $200 million fund and five from its previous fund.


Facts and Figures

 Major US/European venture capital funds have opened Israeli branches, including Sequoia, Benchmark, Accel, Walden, Advent, Apax, Alta-Berkeley, and Partech.

 Many leading US/European funds such as Lightspeed, Accel, and Greylock actively source deals with an in-house Israeli specialist. Many major multinationals invest in Israel such as HP, TimeWarner Inc, Sony, Cisco, and more.

 Between the years 2000- Q1/2005, the top 5 most active foreign investors are Intel Capital, JP Morgan, JAFCO, Accel Partners, and Shamrock.

 Capital raised by Israeli VCs surges to $1.2 billion in 2005

 Capital available for investment now at $2.3 billion

 $1 billion projected to be raised by VCs in 2006

 A total of 428 deals were made in 2004. Israeli companies raised over $1.4 billion in 2004.

 Foreign funds represent over 55% of the total dollars invested in 2004. Over $724 million was raised from Limited Partners for Israeli Venture Funds.

 Israel's 54 seed investment deals are impressive compared to 23 deals in Europe and 72 deals in the US in 2004. In 2004, Israel ranked first in capital raised by hi-tech companies in Europe, beating out the UK, France and Germany who come second, third and fourth.

 Over the past 10 years, Israeli venture capital funds have raised over $8.7 billion. Israel has the highest Venture $/GDP rate in the world, which is seven times the US rate, 1.3% vs. 0.17% (OECD DATA 2004).

 Israel’s venture capital success can be attributed to the impressive entrepreneurial culture that exists. Currently, there are over 2,000 active start-ups in the country and 300-350 are expected to be established in 2006. More companies that originated in Israel are listed on NASDAQ than from any other country in the world. In 2004, 8 venture backed Israeli companies raised $413 million from IPOs.

 The transaction amount from venture backed M&A topped $888 million in Q1/2005 alone.

More Info

www.ivc-online.com


Source: Invest in Israel
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