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Investments in Israeli Startups Up 9% in 2017

Israel-linked tech companies raised $5.24 billion in 2017. A comparative report for the U.S., Europe, and Asia showed funding increases of 17%, 40%, and 117%, respectively

Lilach Baumer 16:4017.01.18
In line with global trends, venture capital investors poured more money into fewer Israeli-linked technology companies in 2017. While investments in Israeli companies totaled $5.24 billion in 2017, up 9% from 2016, the number of deals dropped from 673 to 620, according to a Wednesday report by Israel-based market research firm IVC Research Center Ltd. and law firm Zysman Aharoni Gayer & Co. (ZAG/S&W).

 

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Mid to late growth stage Israel-linked companies attracted the lion's share of investments--$3.9 billion, compared to $3.4 billion in 2016, according to the report. The number of investors involved in early-stage deals dropped 49% in 2017.

Tel Aviv. Photo: Bloomberg Tel Aviv. Photo: Bloomberg

 

 

“Investors chose to provide portfolio companies the necessary means to mature," said Marianna Shapira, research director at IVC Research Center.

 

The increase in investments in Israeli-linked technology companies is mainly due to four over $100 million investment deals, accounting for 12% of the total amount raised, including a $100 million investment in cybersecurity company Cybereason Labs, a $150 million investment in Skybox Security Inc., and a $120 series C investment in insurance company Lemonade Inc. Another deal included in the data is an investment in shuttle-sharing company Via Transportation inc., which raised $50 million in September with an intention to raise as much as $200 million more, according to media reports citing people familiar with the matter.

 

Venture capital investments in U.S. companies totaled $71.9 billion in 2017, up 17% from 2016, according to the MoneyTree report published last week by accounting firm PwC and CB Insights. In Europe, funding jumped 40% to $17.6 billion while the number of deals was up 16% from 2016, according to the report, and in Asia, funding was up 117% from 2016, reaching $70.8 billion, while the number of deals was up 46%.

 

 

2017 also had a record-breaking number of over $100 million deals in the U.S., 109 deals compared to 62 in 2016, while the number of seed deals fell to a five-year low.

 

Venture capital investments in Israeli-linked companies are expected to continue growing in 2018, said Shmulik Zysman, managing partner at ZAG S&W as part of the report published Wednesday, citing guidelines favoring technology investments published by the Chinese government late in 2017.

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