Israeli startups raised $2.1 billion in December 2021, including a record $3 billion in October. The sum may be higher, as some companies prefer to operate in secrecy and do not always announce the funding they receive.
According to IVC-Meitar, Israeli technology startups raised $17.8 billion in the first nine months of 2021.
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The results for October, November, and December bring the total raised this year to $25.7 billion, (more than doubling the previous high of $10 billion set last year) in 773 rounds.
This statistic reflects a 146 percent increase over the money raised in 2020, as well as a 28 percent increase in the number of rounds. Israeli startups concluded the year strongly, raising $8 billion in 206 rounds, up from $5.7 billion in 170 deals in the third quarter.
Claroty, a cybersecurity startup, concluded the largest investment round in December, raising $400 million. Future Meat, a startup that cultivates meat, raised $347 million, Tipalti, a B2B fintech company, raised $270 million, and UBQ Materials, a waste conversion company, raised $170 million. Noname Security, a provider of API security, raised $135 million, First Digital Bank (One Zero) raised $120 million, and Cycognito, a provider of cybersecurity, raised $100 million.
In December, Ermetic, security identity and access management firm, raised $70 million, Ironscales, an email security platform, raised $64 million, and Dazz, a cloud security startup, raised $60 million. Mesh, a fintech business, raised $50 million, Torq, a security company, raised $50 million, and Guardio, a web browsing security company, raised $47 million.
Early rounds (Seed and A) raised In 2021, $3.7 billion in 408 agreements, a 97 percent increase over 2020, but just 14 percent of total capital raised over the previous year. In 2021, growth rounds (Round C+) accounted for 65 percent of all capital raised by Israeli technology businesses.
“Clearly, the Israeli high-tech market saw record levels in 2021. However, there are some considerations for Israeli startups – they will need to demonstrate their value and raise their revenues next year,” said IVC CEO Guy Holzman. “Moreover, it appears as though Israeli high-tech has reached a saturation point with roughly 9,500 active enterprises, with foreign multinationals and Israeli companies with significant resources continuing to lure local talent.”
Adv. Mike Rimon, a partner at Meitar Law Offices, noted that “2021 was the year of the “Big Bang” in terms of Israeli companies filing for initial public offerings in the United States.
After years of very few Israeli companies going public in the United States, 23 Israeli companies listed their stocks in the United States this year, the majority of them at extremely high values. While we anticipate that the number of Israeli firms going public in the United States in 2022 will be less than in 2021, there is no doubt that, in contrast to the past, an IPO has become an exceptionally viable exit strategy for many Israeli companies.”
According to the study, 155 rounds worth more than $50 million were completed in 2021, totaling $18.93 billion. This is a significant rise above the 39 and 47 rounds held in 2019 and 2020, respectively. Additionally, there were 77 mega-rounds totaling more than $100 million, up from 18 and 20 in 2019 and 2020, respectively. These rounds raised a total of $14 billion, accounting for 55% of the total amount raised last year.