IVC Online and KMPG have released their summary of venture capital raising for Q2 2011, in Israel. 285 companies raised $1.048 Billion in the first half of 2011, an 82% increase compared to the $577 million raised in the equivalent period in 2010. In Q2 alone, 145 Israeli companies raised $569 million from both local and foreign VCs.
Mid stage companies accounted for the highest rate of investments in Q2 2011, attracting 44% of all capital invested and later stage followed, with 27%. In the first half of 2011, Mid and late stage companies together raised $749 million, an increase of 108% from the first half of 2010 when mid and late stage companies attracted $360 million. Seed stage investments are down almost by half, accounting for 3% of investments in the first half of 2011, compared to 5% last year.
The Internet sector continues to gain investment dollars, increasing the volume of investment by 155% compared to the first half of 2010. Internet was the leader in investments in Q2 2011 for the first quarter in a decade, attracting $169 million (30%) of all capital raised in Q2. Israeli Internet companies raised $255 million (24% of total) in the first half of 2011, followed by life sciences with $237 million (23%) and communications which attracted $176 million (21%).
Ofer Sela of KPMG said:
“the global hype in mobile internet makes its impact on Israel as well, where the mobile and internet applications are boosting both the communication and Internet sectors investments, these two areas of investments are characterized by a short period of uncertainty regarding the business model of these companies this is the main reason why the majority of seed investments made by micro-funds and angels were focused in these areas and we expect this trend to continue”.