Israeli high tech firms have reached the lowest financial point in five years, says IVC Research in its latest press release. According to the Q1 2010 report, Israeli companies managed to raise $234 million from both Israeli and foreign venture capital funds. This represents a 15% drop from Q4 2009 and a 12% drop from the first quarter of 2009.
Koby Simana, CEO of IVC Research Center, said:
figures for the first quarter of 2010 emphasize that Israel’s high-tech industry is still experiencing substantial difficulty. The decrease in the number of active Israeli VC funds and a reduced amount of capital available for investments, were the main reasons for the decline in capital raising. Unfortunately, we don’t expect any dramatic improvement in the next few quarters.
An aggregate look at the venture capital deals performed in Q1 2010 in Israel, shows a slow down in seed investments and increased interest in Life Sciences over Clean Tech.
Deal size
Fifty-four companies attracted more than $1 million each. Of these, nine companies raised $5 million to $10 million each and five companies raised more than $10 million.
The average financing round was $2.57 million, compared to $2.22 million in the previous quarter and $2.85 million in the first quarter of 2009.
Deal Stage
First investments by Israeli VC funds accounted for 24 percent of their total dollar investments in the first quarter, compared to 27 percent and 29 percent in Q4 2009 and Q1 2009, respectively. The average First investment by Israeli VCs was $1.36 million, while the average Follow-on investment was $0.82 million.
Eleven Seed companies attracted $11 million, 5 percent of the total amount raised in Q1, compared to $11 million raised (4 percent) in the previous quarter, and $13 million (5 percent) in Q1 2009.
Deal Sector
The Life Sciences sector led capital raising in the first quarter with $86 million or 37 percent of capital raised, followed by the Software sector with $32 million or 14 percent, and Semiconductors with $31 million or 13 percent.
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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