Boosted by a prolific second quarter of investments, Israeli hi-tech companies raised a record $3.9 billion in funding during the first half of 2019, according to a financial report published on Wednesday.
Data published by IVC Research Center and international law firm ZAG-S&W revealed that companies raised $2.32b. in 125 deals during the second quarter of 2019 alone, the highest quarterly figure since 2013. In the first quarter of 2019, companies raised $1.55b. across 129 deals.
Funding was boosted by 10 mega-deals, each exceeding $50 million and totaling $1.26b., or 54% of total capital raised in the second quarter. The median deal amount was $5.5m. across 125 deals.
Deals included the $300m. raised by insurance start-up Lemonade, $250m. secured by team management firm Monday, and the $186m. raised by Elbit Systems in a PIPE (private investment in public equity) deal.
“Just when we thought the investment growth in the first quarter of 2019 had broken every record, along comes the second quarter and registers the most significant leap in the total amount raised in the last six years,” said Adv. Shmulik Zysman, managing partner and hi-tech industry leader at ZAG-S&W.
“Indeed, the second quarter of this year recorded the most significant leap ever in the total amount raised – $757m. – compared with the previous quarter, indicating a quarterly record and in accordance record high in H1/2019, unprecedented in recent years.”
Seventy-three venture capital-backed deals accounted for $1.81b., or 78%, of the capital raised in the second quarter. A total of $3.16b. was raised in 148 deals in the first half of 2019, significantly more than the $1.86b. raised during the same period of 2018.
Companies in IT and software companies excelled in the second quarter, raising $1.02b. in 49 deals – the highest since 2013.
Life sciences companies raised $263m. in 27 deals, exceeding the quarterly average of number of deals and amount raised since 2013.
During the second quarter, 174 investments totaling $704m. were made by Israeli investors, also a quarterly high since 2013. Foreign investors increased their activity compared with previous quarters, finalizing 441 investments totaling $1.57b.
“The second quarter of 2019 continues the same trend from recent quarters,” said Marianna Shapira, research director at IVC Research Center. “Israeli hi-tech companies are gaining access to a larger pool of capital for growth companies, especially from foreign investors. This shows growing appetite for the local market. The trend is driving valuations to new heights, presenting challenges both to the companies seeking capital and to local investors.
“If the second half of 2019 continues at the same pace, this year will break previous records for capital volume.”