IVC Research Center has released the results of its latest survey.
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According to a survey by the IVC Research Center, in Q2/2014, Israeli VC funds invested $153 million in Israeli high-tech companies, up 44% and 40 % from investments in Q1/2014 and Q2/2103, respectively. The amount, though, accounted for only 17% of capital raised in the quarter, consistent with the record low 16 % of the previous quarter.
First investments accounted for $52 million or 34 % of total Israeli VC investments – slightly above the 33 % 2013 quarterly average. This compared with 37 percent and 25 percent of Q1/2014 and Q2/2013, respectively.
In Q2/2014, the life sciences stood out as the sector attracting the most investment. Forty-four companies raised $251 million or 27 % of total capital raised. The amount is 83 percent above the $137 million invested in the sector in Q1/2014 and 156 percent more than the $98 million raised in Q2/2013.
Late stage companies continued to lead investments by stage, capturing a record $450 million or 48 % of all investments made in Q2/2014. Mid-stage companies raised $182 million, while their share decreased to an all-time low of 20%.
Koby Simana, IVC Research Center’s CEO points to an analysis of capital raised by round: “In Q2/2014 we saw consistent increases in capital raised at all stages, from early rounds – such as seed and A-round – to later rounds. The increase in early rounds is explained by the Landa deal, which was an A-round for the company. The rise in mid-stage rounds is relatively minor, which means most of the increase in capital raised in the second quarter is a result of more late stage deals from D-round and up.”
Simana offers an explanation of the survey findings: “We found a direct correlation between deal size and round type. It seems a sizable portion of the late-round hike is a direct result of the increase in the number of deals above $20 million. In the first six months of 2014, we counted 15 deals above $20 million, nearly equal to the number of such deals for the entire 2013. ”
In H1/2014, mid and late stage companies accounted for $1.1 billion of total capital raised, a 77 percent increase from $611 million invested in these stages in H1/2013. Seed companies garnered only five percent of capital raised, down from seven percent in H1/2013.
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.