Israel's high-tech raises record $1.7b in second quarter

IVC projects 20% increase in funding this year

By
July 13, 2016 17:50
2 minute read.
Gett Taxi

Gett Taxi logo. (photo credit: Courtesy)

 
X

Dear Reader,
As you can imagine, more people are reading The Jerusalem Post than ever before. Nevertheless, traditional business models are no longer sustainable and high-quality publications, like ours, are being forced to look for new ways to keep going. Unlike many other news organizations, we have not put up a paywall. We want to keep our journalism open and accessible and be able to keep providing you with news and analyses from the frontlines of Israel, the Middle East and the Jewish World.

As one of our loyal readers, we ask you to be our partner.

For $5 a month you will receive access to the following:

  • A user experience almost completely free of ads
  • Access to our Premium Section
  • Content from the award-winning Jerusalem Report and our monthly magazine to learn Hebrew - Ivrit
  • A brand new ePaper featuring the daily newspaper as it appears in print in Israel

Help us grow and continue telling Israel’s story to the world.

Thank you,

Ronit Hasin-Hochman, CEO, Jerusalem Post Group
Yaakov Katz, Editor-in-Chief

UPGRADE YOUR JPOST EXPERIENCE FOR 5$ PER MONTH Show me later

Israeli hi-tech companies collected a massive $1.7 billion in financing during the second quarter of 2016, a 55 percent jump over the first quarter of the year, according to an analysis released by IVC Research Center and KPMG on Wednesday.

The largest of the 187 deals was a $300 million investment in Gett (formerly Get Taxi), a taxi-hailing application. The average deal amounted to $9.2m., up from the $6.5m.

Be the first to know - Join our Facebook page.


average raised by 174 companies last quarter.

Indeed, just 25 of the deals accounted for $1.1 b., a result of a 39% increase in the number of deals over $20m.

“All indicators point to a healthy and vibrant ecosystem that continues to mature and generate new companies,” said Ofer Sela, a partner at KPMG Somekh Chaikin’s Technology group.

Other good news came from the fact that an increasing amount of the funding was coming from abroad.

In the first half of the year, 57% of all the investment deals included at least one foreign venture capital investor, up from 32% average from the first halves of 2015 and 2014.

“The clear increase in large deals is driven by the enhanced activity of foreign investors – primarily corporate investors and VC funds – in growthstage companies. However, the increase is not limited to top-tier deals,” said Koby Simana, CEO of IVC Research Center.


“This across-the-board trend leads us to believe 2016 will continue to be strong in capital raising, with a projected 20 percent year-on-year increase, or about $5.3b. in total to be raised by the end of the year,” he added.

But there were some causes for concern as well, said Chaikin.

“We are in the middle of the summer, and it seems that economic winter is not quite around the corner. Having said that, there is no doubt a significant portion of the growth capital recently raised was induced by the need to prepare for a rainy day,” he predicted.

Earlier this month, IVC noted that the total value of exit deals was down in the first half of 2016 in comparison to the previous year.

Though Simana explained the figure as a symptom of Israeli companies pushing toward growth instead of quick exits, a June report by the National Authority for Technology and Innovation raised red flags about whether Israel was investing enough for its hi-tech sector to remain cutting edge.

Among the concerns were decreased levels of government- backed research and development and a growing shortage of engineers and scientists.

Join Jerusalem Post Premium Plus now for just $5 and upgrade your experience with an ads-free website and exclusive content. Click here>>

Related Content

Workers strike outside of the Teva building in Jerusalem, December 2017
December 18, 2017
Workers make explosive threats as massive Teva layoff strikes continue

By MAX SCHINDLER