Israeli hi-tech investments: $1.55 billion in first quarter of 2019

The sum represents a 28% increase compared to the first quarter of 2018.

By Lilach Baumer, Calcalist

Israeli startups raised a total of $1.55 billion during the first quarter of 2019 involving 128 deals, according to a new report published Tuesday by Tel Aviv-based market research firm IVC Research Center Ltd. and law firm Zysman Aharoni Gayer & Co. (ZAG/S&W). The sum represents a 28% increase compared to the first quarter of 2018 and spread across 15% more deals. Venture capital players accounted for 71 deals and $1.3 billion of the total sum raised.

Compared with the fourth quarter of 2018, this quarter’s total deal number fell 25%, mostly due to a decrease in seed and series A rounds, a company’s first significant round of venture capital financing. The median amount of these early rounds increased, while mid and late rounds continued the uptrend seen since 2016, Series C rounds attracted the most capital of all the rounds, $476 million in total. Deals of over $20 million accounted for 64% of total investments raised.

16% of all capital raised in the quarter is attributed to two deals: LiDAR startup Innoviz Technologies Ltd., which closed a $132 million round in March, and networking software startup Drivenets Ltd., which emerged from stealth, a company’s temporary state of secrecy, with $110 million in February.

Three other deals that surpassed the $50 million mark accounted for 10% of the total funding raised. Database software developer Redis Labs Inc. raised $60 million in February. Cybersecurity company Cato Networks Ltd. raised $55 million in January. Datacenter software company Lightbits Labs Ltd. emerged from stealth in March with $50 million.

The two strongest sectors in terms of investment were software, which captured 42% of all capital raised in the quarter, and life sciences, which accounted for 17%.