Israel Venture Capital Down 40% In Q2 2009

IVCThe IVC Research Center has released its Quarterly Survey today for the first half of 2009. According to the report, 122 Israeli companies raised $279 million from both local and foreign venture investors in the second quarter of 2009. The amount represents a 40% decline compared to the similar period in 2008 ($465M).

Let’s take a look at the numbers:

Capital Raised by Israeli High-Tech Companies – H1 (2003-2009)

Capital Raised by Israeli High-Tech Companies – H1 (2003-2009)

1H 2009 by the numbers

In the first half of 2009, capital raised by Israeli high-tech companies was $544 million, 50 percent below H1 2008 levels of $1.1 billion (the highest since 2001). The average high-tech financing round was $2.29 million, compared to $4.04 million in the second quarter of 2008.

Seventy-four companies attracted more than $1 million each. Of these, 13 companies raised $5 million to $10 million each, and four companies raised $10 million to $20 million each.

Israeli VCs Slow Down

In the first half of 2009 Israeli VCs invested $219 million in Israeli companies, a 48% decrease from the $423 million invested by Israeli VCs in H1 2008. This massive decline will no doubt impact the number of start ups in operation.

In total, Israeli VC funds accounted for 40% of the amount invested in Israeli high-tech in Q2 2009, compared to 35 percent in the second quarter of 2008. The rest came from foreign investors, which have also reduced their activity in Israel. Total amounts invested in Israeli high-tech companies have decreased by 50 percent compared to the previous year.

Good news for young start ups: more Seed investments are available

Early Stage (R&D) companies captured 40 percent of total capital raised. Seed companies attracted 9 percent of capital raised, compared with 5 percent raised in the previous quarter and in the second quarter of 2008, respectively.

First investments accounted for 38 percent of total dollar investments by Israeli VCs in the second quarter and 34 percent in the first half of 2009, compared to 22 percent and 35 percent in the second quarter of 2008 and H1 2008, respectively.

The average First investment by Israeli VCs was $2.87 million, while the average Follow-on investment was $0.83 million.

In terms of sectors, Life Sciences attracted $76 million or 27 % of total capital raised, followed by Software with $64 million or 23%.

Eze Vidra
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Eze Vidra

Chief Innovation Officer at Antidote
Eze is the Chief Innovation Officer at Antidote, a startup helping patients search and match to clinical trial, to accelerate medical breakthroughs. Previously, Ezewas a General Partner at Google Ventures Europe. Before GV, Eze founded and led Campus London, Google's first physical hub for startups, and was the Head Google for Entrepreneurs in Europe. He's an experienced product manager and startup mentor. In 2012 Eze founded Techbikers, a non-for profit supporting children education in developing countries.
Eze Vidra
Follow me

Eze Vidra

Eze is the Chief Innovation Officer at Antidote, a startup helping patients search and match to clinical trial, to accelerate medical breakthroughs. Previously, Eze was a General Partner at Google Ventures Europe. Before GV, Eze founded and led Campus London, Google's first physical hub for startups, and was the Head Google for Entrepreneurs in Europe. He's an experienced product manager and startup mentor. In 2012 Eze founded Techbikers, a non-for profit supporting children education in developing countries.

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