Published On: Mon, Apr 12th, 2021

Israeli startups capital raising skyrocketing to record $5.37 billion in first quarter of 2021

The fund raised increased by 89% compared to the fourth quarter of 2020 and doubled the sum raised in Q1 of 2020

Key findings Q1/2021:
• $5.37 billion were invested in 172 Israeli tech deals – doubled compared to capital volume raised in Q1/2020
• 20 deals exceeded $100 million each – 55% of the total amount raised this quarter
• Early rounds (Seed + A) investments sharply increased –more than double of the average amounts in 2015-2020
• Quarterly M&A transactions have summed up to $2 billion
• Out of the total 21 IPO deals, 19 deals were performed on Tel-Aviv Stock Exchange (TASE)

The quarterly capital amount for the Israeli high-tech soared to $5.37 billion in 172 deals, according to IVC Research Center.

The quarterly capital amount for the Israeli high-tech soared to $5.37 billion in 172 deals, according to the Survey

The sum raised in the first quarter of 2021 increased by 89% compared to the fourth quarter of 2020 and doubled the amount raised in the first quarter of last year.

The prolific results mainly were due to 20 funding rounds, more than $100 million each. A total of $2.96 billion or 55% of the funds raised in the first three months. It nearly tripled from the last quarter.

The increased funding levels were derived based on foreign investors’ activityץ They made 594 investments (in 124 deals), a rise compared to under 400 quarterly investments in the years 2019, 2020.

VC deals continued their fast growing trend. This quarter they made 96% or $5.18 billion, in 134 deals. On the other end, non-VC deals continued to shrink and sank to 22%. Probably another sign of the increasing valuations.

The high amounts in 2021 funding similar the boost in the Israeli high tech startups’ valuations in Nasdaq indexes. The correlation between the private tech companies funding and Nasdaq valuations proposes that Israeli tech financing might expect some decline in the capital flow further into 2021.

According to IVC, early-round investment (seed and A) deal-making kept an average pace, while the capital investment volume continued to climb.
Some 34 later rounds this quarter – $2.18 billion in total amount. Also, M&A transactions accounted for $2.07 billion (33 transactions) of total capital intake in Q1. These figures support the return to normality after the slowdown in M&As activity in 2020.

“2021 started with record quarterly capital intake, as well as a rebound in exit proceeds, demonstrating a bustling quarter in local initial public offerings activity,” said Marianna Shapira, Research Manager at IVC.
“However, this robust quarter has been successful mostly for the growth stage, veteran companies that have been accepted on global scale, and possess long-term connections with the foreign investors’ community. A different picture can be seen on the other scale of the Israeli startups’ scene. Though younger startups enjoyed some increase in capital intake, their numbers didn’t climb up, which implies that there is much harder competition among companies seeking capital.”

 

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