The latest IVC report shows that Israeli VC funds were able to raise only $229 million in 2009, a staggering 72% less than $803 million raised in 2008 and the third lowest amount raised per annum in the last decade.
Only three Israeli venture capital funds completed their fund raising efforts in 2009:
- Sequoia Capital Israel, announced final closing of Sequoia IV, a $200 million vintage 2009 fund.
- TriVentures II, a $25 million medical device fund (with American medical technology company Medtronic Inc. as its main investor)
- Startvest 09, the Targetech Innovation Center’s new fund, which raised $3.7 million
In 2010, the capital available for investment in first round and follow on rounds now stands on $1.2 billion (net management fees and operational expenses). Of that, IVC believes that $400 are already committed for first investments and
Koby Simana, IVC CEO, said:
“foreign institutional investors – who before the crisis had been the lead source of capital invested in Israeli funds – have suffered serious losses due to the credit crunch. These losses have reduced capital available for investments. The decrease in capital raised by Israeli venture capital funds reflects a global trend. In 2009 for example, US venture capital funds suffered a 48 percent decrease in their fund raising efforts, compared with capital raised in 2008.”
A sign of the times or lack of performance?
A report by the California Public Employees’ Retirement System (CalPERS) released this week (see Globes), showed that most Israeli venture capital funds had negative performance in Q3 2009. The Carmel I Fund, raised in 2000, had the highest performance, giving an internal rate of return (IRR) of 8% and a positive multiple of 1.4. Other funds, including Apax Israel II, Israel Seed IV and JVP showed negative IRRs of 20-30%.
I'm a former general partner at google ventures, head of Google for Entrepreneurs in Europe and founding head of Campus London, Google's first physical hub for startups.
I'm also the founder of Techbikers, a non-profit bringing together the startup ecosystem on cycling challenges in support of Room to Read. Since inception in 2012 we've built 11 schools and 50 libraries in the developing world.
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