According to the latest IVC–KMPG quarterly survey published today, in the first quarter of 2012, venture capital investments in Israel rached $483 million, up slightly from the amount invested in Q1/2011. 144 Israeli high-tech companies raised $483 million from Israeli and foreign venture investors, 15% below $569 million raised by 124 companies in the previous quarter, but almost equal to $479 million raised by 140 companies in Q1/2011.
Rounds becoming smaller, more first investments
The average company financing round was $3.40 million, compared to $4.59 million in Q4/2011 and up slightly from $3.42 million in Q1/2011.
First investments by Israeli VC funds accounted for 48% of their total dollar investments in the first quarter, the highest percentage in the last four years. Compared to 44 percent and 23 percent in Q4/2011 and Q1/2011, respectively. The average first investment by Israeli VC funds was $1.9 million, while the average follow-on investment was $1.05 million.
Israeli VC participation keeps declining, foreign VC activity is up
In the first quarter of 2012, Israeli venture capital funds invested $119 million in Israeli companies, 10 percent below the amount invested in the previous quarter, and 13 less than in the first quarter of 2011.
The Israeli VC fund share of the total amount invested in Israeli high-tech companies was 25 percent, compared to 23 percent ($132 million) in Q4/2011 and 28 percent ($137 million) in Q1/2011. The remainder of capital came from foreign as well as other Israeli investors.
Foreign investors were especially keen on making “First Investments”, the data shows. In the first quarter of 2012, investment transactions excluding Israeli VC fund participation reached $236 million or 49 percent of all transactions, the highest share in a decade. This compares with $218 million (38 percent) and $157 million (33 percent) in Q4/2011 and Q1/2011, respectively.
Investments are trending towards early stage
In the first quarter of 2012, seed companies attracted 6 percent of total capital raised, compared with 4 percent in the previous quarter and 3 percent in the fourth quarter of 2011. Early Stage companies accounted for $174 million or 36 percent of the total capital raised, reaching the highest quarterly amount for early stage companies in the past two years.