Photo Credit: Andrew McIntire / TPS
Tel Aviv Stock Exchange

by Ilan Evyatar

Israeli high-tech start-up companies raised a record $5.24 billion in 2017, an increase of nine percent over the previous year, according to the latest IVC Research Center-ZAG report, published Wednesday.

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The sum was raised in just 620 deals, compared to a total of $4.83 billion raised in 673 deals in 2016 as venture capital investments grew for the fifth consecutive year.

Four large deals of over $100 million each accounted for 12 percent of the total amount raised (Cybereason, Via, Lemonade and Skybox) with an average of $8.5 million per deal in 2017, compared to just $3.6 million in 2013.

Israeli VC funds invested $814 million in 2017, the highest sum since 2013, and an increase of 25 percent from $651 million in 2016.

IVC data showed that mid- and late stage companies attracted the largest portion of funding raising $3.9 billion, compared to $3.4 billion in 2016, while the number of deals in seed stage dropped 17 percent from last year.

Mid-stage companies increased their share to $2.1 billion in 2017, compared to $1.8 billion in 2016. Seed and early stage companies raised $1.36 billion in total throughout 2017, compared to $1.43 billion the previous year.

Shmulik Zysman, Managing Partner for the high-tech sector at the Zysman, Aharoni, Gayer & Co. law firm said the figures were consistent with growth trends over the past five years and that the growth of the average financing round per company were “an interesting change, possibly increasing the chances for the next Israeli Mobileye to flourish.”

Zysman said he expected the positive trend to strengthen in 2018 and to receive a boost from regulatory changes in China.

“The lack of clarity in regulations prevailing in China in 2017 was often exploited by Chinese investors to withdraw from investment agreements. Close to the end of the year, the Chinese regulator established clear investment rules/regulations, among them a recommendation to perform investments in the technology industry. This addition of Chinese investments to the regular capital intake of Israeli technology market is the major reason for my optimism,” Zysman said.

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