Entree Capital and F2 Venture Capital were the most active venture capital funds in Israel in 2020, with 14 first investments each, according to a report by IVC and the law firm APM & Co published Monday.
The number of first investments soared to 620, a seven-year record, and an increase compared to 470 in 2019. The number of first investments by foreign VC funds was the highest in seven years.
The trend for first investments was focused toward later round fundraising, the report said.
"We are seeing a rise in the number of first investments in late-stage rounds, which is unsurprising since we identify a significant number of transactions, of all types, and the numbers support the same," said Adv. Yonatan Altman, chairman of Amit, Pollak, Matalon & Co. "On the other hand, the rise in the number of first investments in early-stage rounds and the recovery observed compared to 2019 brings an excellent indication of increased faith and readiness by the market to carry out earlier stage investments. However, it is somewhat fragile change, observed over a single year, but the substantial numbers with which 2021 opened give us the comfort in expressing cautious optimism."
Entree Capital has $345 million under management, and F2 Venture Capital manages $140 million.
In second place were American private equity and venture capital fund Insight Partners ($5.8 billion under management), along with Israeli Peregrine Ventures ($333 million under management) at 13 first investments.
South Israel Bridge Fund (SIBF) ($155 million under management) and American GoAhead Ventures VC fund ($110 million under management) both ranked third with 11 first investments in 2020.
In total, Israeli VCs' participation in first investments grew 65% in 2014-2020 compared to a 25% increase of the foreign VCs. The number of first investments by Israeli VC funds in 2020 accounted for 45% of all first investments, almost the same as their 46% share in 2019, the report said.
“In 2020, there was an increase in the number of Israeli venture capital funds and an increase in the diversity of types of funds," noted Marianna Shapira, Research Manager at IVC. "New types of investment models such as growth funds and academic funds, cater the diverse demand on the part of start-ups.”