Israeli hi-tech startups raise record $3.2b in first half of 2018

Israeli hi-tech companies raised a record $3.2 billion in the first half of 2018, the best year yet in this decade. 

By: World Israel News Staff

Israeli high-tech companies raised a record $3.2 billion the first half of 2018, which was higher than the annual total capital raised in 2010-2013.

According to figures published by the IVC Research Center, Israeli high-tech companies raised $1.61 in the second quartets in 170 deals, including $300 million by Landa Digital Printing – 19 percent of the total amount raised in the second quarter.

Excluding the Landa financing round, the overall amount raised in the first half of 2018 is still the highest since the beginning of the decade.

However, the number of venture-capital-backed deals declined to 94 in the second quarter. VC-backed deals accounted for 55 percent of the total number of deals. The capital raised in VC-backed deals totaled $841 million.

Non-VC-backed capital raising reached $765 million. Due to the Landa financing round, the capital share of the non-VC-backed rounds soared to 48 percent of the total capital raised, higher compared to the historical quarterly benchmark.

C rounds captured 26 percent of the total capital raised due to a single large deal by Landa. The C round is a stage in raising capital by selling equity in the company, after the A and B rounds.

Artificial Intelligence (AI) companies attracted the highest capital share among the leading verticals.

Adv. Shmulik Zysman, managing partner at Zysman, Aharoni, Gayer & Co. (ZAG-S & W), said that “the trend of growth in investments in Israeli high-tech continues to stand out. After a particularly strong first quarter, the amount of capital raised in Q2/2018 continues to rise. With the exception of the Q2/2016, this quarter represents the most successful quarter in the last six years. We are also seeing an increase in capital raised from foreign investors. In our opinion, this growth is also due to an increase in investments from China, as well as from European investors who are interested, among other things, in automotive technology.”

Zysman added that “this quarter, along with a certain decline in the volume of investment in companies in the early maturity stages (Seed and R&D) compared to the previous quarter, we saw the continued increase in the amount of investment in late stage companies. Our optimism continues at the start of the second half of the year. Following the breaking of records in Q1, the amounts of capital raised in Q2/2018 increased. We expect these trends to continue, both in terms of capital raising and foreign investors entering into the Israeli high-tech industry.”