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IVC Research Center has released the results of its latest survey.
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A survey conducted by the IVC Research Center found that $930 million was raised by 175 Israeli high-tech companies in Q2/2014. This represents the highest quarterly amount since 2000 and a 38% jump from the $673 million raised in Q1/2014, as well as 109% above the $446 million attracted in Q2/2013
The average company financing round reached $5.3 million in Q2/2014, compared to $4.2 million in Q1/2014 and $3.2 million in Q2/2013.
The quarterly figures included a $135 million investment in Landa Digital Printing by Germany’s ALTANA Group. However, even excluding this deal, the quarter’s investments reached an exceptionally high $795 million, 18% more than that of the previous quarter, and 78% above the amount in the year-earlier period. The average company financing, excluding the Landa deal, reached $4.57 million.
One hundred and eight VC-backed deals accounted for $572 million or 62 percent of total capital raised. While this was well below the five year average of 77 percent, the amount was 29 percent above the $444 million quarterly average since the start of 2013.
The average VC-backed financing round was $5.3 million, compared to $6.1 million in Q1/2014 and $4.2 million in Q2/2013.
In the first half of 2014, 335 Israeli high-tech companies raised $1.6 billion, an increase of 81 percent from $885 million in H1/2013, and 67 percent from $962 million in H1/2012. This was the strongest capital raising period on record for Israel’s high-tech industry.
In H1/2014, the average VC-backed company financing round reached $5.64 million, compared with $3.72 million in H1/2013.
Ofer Sela, partner in KPMG Somekh Chaikin’s Technology group commented, “Mature, revenue growth companies are continuing to raise significant capital. While in the past, venture capital funds saw the M&A route as providing the best opportunity for revenue growth company exits, potential NASDAQ IPOs are now a major driver of VC investment.
“SaaS and other companies operating in a recurring revenue model are dominating VC-backed investment. There are a significant number of seed stage firms positioning themselves as recurring revenue model companies as the transition from a product company to a service company is very challenging at a later stage.”
The Survey reviewed capital raised by Israeli high-tech companies from Israeli and foreign venture capital funds as well as other investors, such as investment companies, corporate investors, incubators and angels. It is based on reports from 88 investors of which 42 were Israeli VC management companies and 46 were other entities.
