Israeli VC investments are picking up pace and have reached a record level since the Lehman Brothers collapse in 2008. According to the MoneyTree Report produced by PWC Israel, Venture-backed companies raised $342 million in the first quarter of 2011, a dramatic 102% increase from the  $170 million raised in the equivalent period in the previous year.

VC Cafe brings you a the highlights of the report in bitesize nuggets:

  • The average investment per company in the quarter under review was $4.1 million, from $3.5 million in the preceding quarter and $2.4 million in the corresponding quarter of last year.
  • The Internet sector saw a massive increase in deals, with an investment $75 million in Q1 2011, the highest level ever reported
  • Deals are getting bigger. This quarter, $179 million were invested in 9 deals of over $10M, compared with $120.5 million in 6 deals the previous year
  • A staggering 43% of Israeli VC funds made no investment in Q1 2011.  Slight improvement from the 46% of “no action” VC funds in the last two quarters.
Question: How can you charge 2% management fees if you don't make any investments?
  • Annual investment levels of Venture Capital Funds (in millions of dollars) are on the way UP

  • Average investment per company (in millions of dollars) is recovering, which means healthier valuations for Israeli startups
Average investment per company (in millions of dollars)
  • Don’t hate on government grants – Thirty six companies, representing 43% of all companies raising VC capital in the first quarter of 2011, are supported by the Office of the Israel Chief Scientist. Some $146 million of total investment funds went to these companies.
  • A total of 58 companies, representing 70% of companies raising VC capital in the first quarter of 2011, are registered in Israel. These companies raised $186 million or 54% of total investment. The remaining companies are mostly incorporated in the US.
  • Seed/Startup stage investments have declined, and are still a challenging investment gap to solve. 8 startups raised $15 million during the first quarter of 2011, representing 4% of total investments this quarter. This compares to 9 companies raising $8.5 million last quarter and 12 companies raising $16.7 million in the corresponding quarter of last year.

To download a copy of the MoneyTree report, use this link.

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Eze Vidra
Co Founder and Managing Partner at Remagine Ventures
Eze is managing partner of Remagine Ventures, a seed fund investing in ambitious founders at the intersection of tech, entertainment, gaming and commerce with a spotlight on Israel.

I'm a former general partner at google ventures, head of Google for Entrepreneurs in Europe and founding head of Campus London, Google's first physical hub for startups.

I'm also the founder of Techbikers, a non-profit bringing together the startup ecosystem on cycling challenges in support of Room to Read. Since inception in 2012 we've built 11 schools and 50 libraries in the developing world.
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Eze is managing partner of Remagine Ventures, a seed fund investing in ambitious founders at the intersection of tech, entertainment, gaming and commerce with a spotlight on Israel. I'm a former general partner at google ventures, head of Google for Entrepreneurs in Europe and founding head of Campus London, Google's first physical hub for startups. I'm also the founder of Techbikers, a non-profit bringing together the startup ecosystem on cycling challenges in support of Room to Read. Since inception in 2012 we've built 11 schools and 50 libraries in the developing world.

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