Boosted by a series of high-value deals, Israeli hi-tech companies raised $2.24 billion in the third quarter of 2019, the highest quarterly sum since 2013.
According to a report by IVC Research Center and the international law firm ZAG-S&W, hi-tech companies secured 142 deals in the last quarter– also the highest number since 2013 – including 13 large deals exceeding $50 million each, which accounted for 57% of the total capital raised.
Firms have raised a total of approximately $6b. since the beginning of the year. In 2018, hi-tech companies raised a full-year total of $6.35 b., the report stated.
The six largest deals secured in the third quarter, each exceeding $100 m., totaled $841 m. These included $200 m. raised by cybersecurity technology company Cybereason, $176 m. raised by fintech company Fundbox and $135 m. raised by Jerusalem-based app developer Lightricks.
During the last quarter, venture capital-backed deals raised $1.6 billion in 81 deals, compared to $1.31 b. in 72 deals during the same period last year. During the first three quarters of the year, venture capital-backed deals raised $4.68 b., similar to the amount raised in all of 2018.
"As a former athlete, I know that once you reach first place, the real difficulty is holding on to it," said Adv. Shmulik Zysman, managing partner and hi-tech industry leader at ZAG-S&W.
"After seeing record-breaking numbers in the previous quarter, the third quarter even surpassed it, with this year's recruitment record breaking every previous quarter. The record was recorded both for the Israeli funds, whose total borrowing remains high and stable, and for the total capital, which climbed by 45% in the corresponding quarter last year and last quarter."
Following previous trends, the software sector continued to lead the way in securing funding deals, raising almost $1.4 b. in 52 deals. Life science companies witnessed an increase in capital, raising $350 m. in 38 deals compared to $239 m. in 29 deals in the third quarter of 2018.
"The increase in capital raising activity in Israel recorded during the first three quarters of 2019 is in line with the global trend in the high-tech industry," said Marianna Shapira, research director at IVC Research Center.
"One notable trend expected to continue during the fourth quarter of this year is the rapid growth of fast-growing software companies, especially in the artificial intelligence and cyber verticals," she said.
In the last quarter, Israeli venture capital funds invested a total of $280 m. in 56 deals. Almost half of the capital (49%) was invested in companies in the initial revenue stage. Israeli funds, the report added, have accelerated their involvement in local companies since the beginning of the year, making 267 investments - an 18% increase since the corresponding period in 2018.