Israeli high-tech companies raise $404M in Q2/2006
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Israeli high-tech companies raise $404M in Q2/2006
IntelHub.com <http://www.intelhub.com/> news agency
Israeli high-tech startups raised $404M from both foreign and local venture
capital investors in the second quarter of 2006. This brings the total
financing raised in the first half of 2006 to $764M, a four percent increase
from H1/2005 levels.
A total of 109 companies raised an average of $3.7M during the quarter, up
4% from the previous quarter. Sixty-nine companies attracted more than $1M;
of these, 21 companies raised between $5M and $10M and 13 companies raised
in excess of $10M.
Israel has experienced an increase in the involvement of foreign investor
companies and private investors in recent months.
According to Guy Holtzman, a general manager of the Israeli Venture Capital
Research Center (IVC), “venture capital investors are showing more interest
and involvement in Israel”. Foreign venture capital funds accounted for 62%
of the raised financing, a contribution of $250M, and a 13% increase from
Q1/2006. The remainder of the capital came from Israeli VC and non-VC
investors. “We are experiencing a reawakening in the activity of Israeli
investment companies and private investors as well as that of foreign
investors”, added Mr. Holtzman.
Drop in Seed Funding
According to the IVC report, 10 seed-stage companies drew $14M, only 3% of
the capital raised. This is a significant drop from 14% in the previous
quarter and 6% from the second quarter of 2005. However, according to Efrat
Zakai, Director of Research at IVC, “when combined with the exceptionally
high investments in the first quarter, the number reflects a continuing
trend in seed investments”.
Capital Raised by Sector
The leading high-tech sectors continue to be communications at 32% of
capital raised, life sciences at 17% and software at 15%. The Internet
sector finally experienced an increase in investment, after extremely low
financing over the past few years. Internet startups attracted $36M, or 9%
of the total capital raised. This figure is still a long way from the 48%
peak in Q1/2000, but remains relatively high compared to the quarterly
average of 3.6% over the last four years.
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