No credit crunch in Israel VC market with 52% rise
The Israel VC market has reached a seven year high, which may be an indication that companies are raising as much capital as they can before the equity winter sets in. The amount of VC raised by Israeli companies in Q1 of 2008 rose by a massive 52 percent, reaching another peak.
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In the first quarter of 2008, 135 Israeli high-tech companies raised $617 million from venture investors – both local and foreign. The amount raised was the highest in seven years, 52 percent above the amount raised by 121 companies in the first quarter of 2007, and 23 percent above the previous quarter’s amount raised by 115 companies.
“2008 started exceptionally well, demonstrating the strength of the local high-tech industry,” said Zeev Holtzman, chairman of IVC Research Center and Giza Venture Capital. “A relatively high number of high-tech companies took advantage of the momentum built up in 2007 and raised significant capital based to the premise that ‘one should raise money when one can and not when it’s needed.’ Capital raising activity will probably moderate in upcoming quarters. Yet, we expect that the $1.6 billion average investment level of the last few years will be maintained in 2008.”
Ninety-six companies attracted more than $1 million each. Of these, 29 companies raised between $5 million and $10 million each, 14 companies raised between $10 million and $20 million each, two companies raised between $20 million and $30 million each, and two companies raised more than $30 million.
Israeli domestic VC investment stable at 43%
In the first quarter of 2008, Israeli VCs invested $262 million in Israeli companies, 53 percent more than in the first quarter of 2007 and 84 percent above investments made in the previous quarter (Q4 2007). “We haven’t seen such high figures since the first quarter of 2001.” said Efrat Zakai, director of research at IVC. “The quarter was characterised by a high level of investment by Israeli VCs, as six funds each invested more than $15 million.”
The Israeli VC investment share of the total capital invested was 43 percent, very close to previous year’s average of 42 percent. First investments accounted for 42 percent of total dollar investments by Israeli VCs in Q1, compared with 51 percent in the first quarter of 2007 and 33 percent in Q4 2007. The average first investment by Israeli VCs was $2.6 million, while the average follow-on investment was $1.2 million.
Chart: Capital raised by Israeli high-tech companies ($m)
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© Chilli Publishing Ltd 2008 |
30 APR 2008 |
