12% Drop in VC Investments in Israel for Q1 2010

Israeli high tech firms have reached the lowest financial point in five years, says IVC Research in its latest press release.  According to the Q1 2010 report, Israeli companies managed to raise $234 million from both Israeli and foreign venture capital funds. This represents a 15% drop from Q4 2009 and a 12% drop from the first quarter of 2009.

Koby Simana, CEO of IVC Research Center, said:

figures for the first quarter of 2010 emphasize that Israel’s high-tech industry is still experiencing substantial difficulty. The decrease in the number of active Israeli VC funds and a reduced amount of capital available for investments, were the main reasons for the decline in capital raising. Unfortunately, we don’t expect any dramatic improvement in the next few quarters.

An aggregate look at the venture capital deals performed in Q1 2010 in Israel, shows a slow down in seed investments and increased interest in Life Sciences over Clean Tech.

Deal size

Fifty-four companies attracted more than $1 million each. Of these, nine companies raised $5 million to $10 million each and five companies raised more than $10 million.

The average financing round was $2.57 million, compared to $2.22 million in the previous quarter and $2.85 million in the first quarter of 2009.

Deal Stage

First investments by Israeli VC funds accounted for 24 percent of their total dollar investments in the first quarter, compared to 27 percent and 29 percent in Q4 2009 and Q1 2009, respectively. The average First investment by Israeli VCs was $1.36 million, while the average Follow-on investment was $0.82 million.

Eleven Seed companies attracted $11 million, 5 percent of the total amount raised in Q1, compared to $11 million raised (4 percent) in the previous quarter, and $13 million (5 percent) in Q1 2009.

Deal Sector

The Life Sciences sector led capital raising in the first quarter with $86 million or 37 percent of capital raised, followed by the Software sector with $32 million or 14 percent, and Semiconductors with $31 million or 13 percent.

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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