Quarterly Investments in Israeli-linked Tech Companies Surge, Report Says

Israeli-linked tech companies raised $1.44 billion in the third quarter of 2017, up 54% from $933 million in the third of 2016, according to a report published Tuesday.

Investments were up 13% from the second quarter of the year, according to the report by Israel-based market research firm IVC Research Center Ltd. and Israel-based and law firm Zysman Aharoni Gayer & Co. (ZAG/S&W).

Tel Aviv

The IVC survey reviews capital raised by Israeli high-tech companies from Israeli and foreign venture capital funds, as well as other investors, such as investment companies, corporate investors, incubators, and angels.

The surge in investments in Israeli-linked companies reported by IVC falls in-line with global trends. Total global venture capital investments in the third quarter of 2017 grew around 50% quarter over quarter, according to a projection by Crunchbase presented in a report published earlier this month.

A $250 million investment in shared transport company Via stands out as the largest investment reported by an Israeli-linked company over the third quarter, boosting the quarterly investments total. Five deals of over $50 million each were made during the third quarter, accounting for 33% of the aggregated sum, according to the report.

The average investment round reported by an Israeli-linked company stood at $10 million, the highest in a five-year period, and up nearly 50% from an average round of $6.7 million. Size of funding rounds raised by Israeli-linked companies has grown steadily from $3.3 million in the first three quarters of 2013 to a record $8.2 million over the last three quarters.

In the first nine months of 2017, Israeli-linked technology companies raised $3.8 billion, equal to the aggregated sum raised in the corresponding period of 2016. The number of deals, however—457 deals in total—declined to the lowest number in the past five years. The average financing round has grown steadily from $3.3 million in the first three quarters of 2013 to peak at $8.2 million in the corresponding period of 2017.

Venture Capital-backed deals accounted for the largest quarterly amount in the past five years, with $1.2 billion raised in 89 deals.

43% of the total capital raised in the third quarter was invested in late-stage companies, reaching a record of $618 million, compared with $425 million in the second quarter of 2017 and $294 million in the third quarter of 2016. Early stage deals increased 30% totaling $352 million, compared with $238 million in the same period last year. Noticeably fewer deals were made in mid-stage companies.