Investments from Japan in Israel Startup Nation firms saw a decline of 40% in 2022 over previous years, found Harel-Hertz Investment House Ltd (HIH). The number of investments declined by 28% to 67 investments compared to 2021, returning to the pre-pandemic trend.
The drop was attributed to a sharp decline in the value of the Yen against the Dollar, making it less likely that Japanese firms would invest anywhere abroad and not just in Israel. And investment in Startup Nation declined overall in 2022 as the entire world suffered from a global financial crisis sparked by the Russian invasion of Ukraine in March 2022. H2 2022 saw a large number of Israeli firms – both established and startups – forced to lay off workers and even shutter entirely.
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HIH said that even with the overall slowdown, Japan remains an impactful player in Israeli high-tech in 2022, with investments of $1.558 billion, which is 10% of the total volume of investments.
HIH also reported that Japanese investments are following the trend of shifting to Early-stage investments in Seed and A-round (overall growth trend of 22% Increase in Seed investments in Israeli High-tech as reported by the 2022 report by Start-up Nation Finder: Japanese Investments in Early-stage (Seed & A) increased by 10%, Japanese Investments in Late-stage (B+) decreased by 9%.
The firm also reported that out of the 67 investments completed in 20200, 28 came from CVC’s (corporate VC’s), 25 from Financial Japanese VC’s, and 4 by Japanese VC’s located in Israel.
Of the total 67 investments counted in 2022, 42 investments are first-time investments while 25 investments were follow-up investments. This fact, said HIH, may explain the increase in SEED and A round activity by Japanese investors this year.
Founded in 1994, Harel-Hertz Investment House Ltd (HIH) is a strategy and business development consulting and investment banking boutique, promoting business between Japan, Israel, and the world. HIH provides “tailor-made services” at “top professional standards, with personalized attention to every customer, to fit the specific requirements of each business opportunity.” HIH is connected with leading Israeli technology companies, entrepreneurs, VCs, and opinion leaders within the booming Israeli startup ecosystem and academia.
