(Israel21C) The forecasts of wobbly world economies and an Israeli civilian workforce in need of more human resources did not stop the cash flow of investments into Israeli startups in the first half of 2016. In fact, Israeli high-tech capital raising reached an amazing $2.8 billion in the first six months of the year, according to a report by IVC Research Center.
Israeli technology companies raised an astonishing $1.7 billion in Q2/2016, in 187 financing deals. In Q1/2016, 174 Israeli high-tech companies raised $1.1 billion in private financing rounds.
“There’s no question that investors are still very confident in Israel. Good companies will always raise [money],” Amit Karp, a vice president at Bessemer Venture Partners and who focuses on investments in Israel and Europe, tells ISRAEL21c.
The 361 deals are 35 percent above the $2.1 billion raised in 327 deals in the first six months of 2015, according to the IVC Research Center.
According to the report, most of the money invested in the first months of the year went to life-sciences and software companies. There were also investments in communications, Internet, cleantech, semiconductors and other sectors.
“Despite the slowdown reported in high-tech capital raising and venture capital investments in the United States, and until now – despite various forecasts published lately regarding the industry in Israel – the results of the first quarter of 2016 indicate stability,” said Koby Simana, CEO of IVC Research Center, which analyzes and monitors Israel’s high-tech industry.
“All indicators point to a healthy and vibrant ecosystem that continues to mature and generate new companies. We are in the middle of the summer, and it seems that economic winter is not quite around the corner. Having said that, there is no doubt a significant portion of the growth capital recently raised was induced by the need to prepare for a rainy day,” said Ofer Sela, partner at KPMG Somekh Chaikin’s technology group.
Gett, Interlude, enSilo, Lumus and more
Gett (formerly GetTaxi) taxi-hailing app recorded the largest investment deal in the second quarter – a $300 million strategic investment by Volkswagen.
Among the other headline-grabbing investments so far this year are ridesharing app Via‘s $100 million Series C funding round by strategic investors from North America, Europe and Asia; Sony Pictures Entertainment’s “multi-million dollar investment” in Interlude media and technology startup; Trax Image Recognition‘s $40 million Series C funding round; content-marketing platform Yotpo‘s $22 million funding round; innovative marketing and loyalty platform AppCard‘s $20 million Series B funding round; and the Chinese-led $15 million investment in Lumus, a developer of high-end transparent near-to-eye displays for augmented reality (AR), mixed reality (MR) and smart eyewear.
Other big investments include a $9 million financing round for cybersecurity startup enSilo; United Overseas Bank Limited (UOB)’s $10 million in OurCrowd; $50 million in Series B funding for augmented-reality startup Meta; online assistance platform toolkit provider WalkMe‘s $50 million Series E funding; a $25 million investment round byEarlySense, a leader in contact-free continuous monitoring solutions; and storage startup Weka.IO’s VC-backed funding round worth $22.25 million, among many others.
The high-flying first half of year investment results are in part thanks to continued increase in deals above $20 million.
“The clear increase in large deals is driven by the enhanced activity of foreign investors – primarily corporate investors and VC funds – in growth-stage companies,” said Simana. “However, the increase is not limited to top-tier deals. We are also seeing an increase in low- to mid-range deals, with those between $5 million and $10 million jumping 50 percent, to a record $234 million. This across-the-board trend leads us to believe 2016 will continue to be strong in capital raising, with a projected 20 percent year-on-year increase, or about $5.3 billion in total to be raised by the end of the year.”