Facebook’s much-anticipated initial public offering will likely provide an
unintended boost for Israeli Internet start-ups, according to accountancy firm
Deloitte Brightman Almagor Zohar.
The excitement surrounding the expected
sale of the social network and publication of its vital statistics should
trigger fresh global interest in venture-capital investment in Internet and
new-media start-ups, the firm said in its quarterly VC Indicator Survey, which
it published Sunday. It said the impact would naturally be felt by Israeli
Facebook filed for its IPO last Wednesday, which is expected
to value the company at somewhere between $75 billion to $100b. The application
revealed that the company generated a $1b. profit last year from $3.71b. in
revenues, most of which were made from advertising.
The rest of the VC
Indicator Survey was not quite as positive. Based on a poll of venture
capitalists taken in the last quarter of 2011, it predicted that the growing
economic crisis in Europe would hurt the Israeli hi-tech
Eight-seven percent of senior Israeli venture capitalists
polled for the survey foresaw decreased activity this year.
been a decline in the number of traditional venture-capital funds, said the
report’s author, Tal Chen. But other support bodies are emerging, he said, such
as venture-capital microfunds that support start-ups in the early stages,
accelerators that accompany them in developing their project and groups of
Thirty-nine percent of respondents said they would
invest less in start-ups in the next six months, while only 10% said they would
increase investments in that period; 69% predicted it would be harder for
start-ups to raise capital in the first half of 2012 than it was in 2011, while
just 6% believe it will be easier; 22% said they would target investments in
late-stage companies in 2012, compared with fewer than 6% last year.
over half the venture capitalists said the current economic crisis would have a
similar effect on hi-tech companies as the 2008-09 global crisis. Exactly
one-quarter believed the current crisis would have a smaller impact than the
previous crisis, while 22% said it would have a greater effect. The Internet was
the most attractive industry for venture-capital investment and mergers and
acquisitions this year, while cleantech was the least attractive, the survey
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