According to the 2022 summary report of Start-Up Nation Central, together with the Startup Nation Policy Institute published Tuesday, investments in Israeli hi-tech companies decreased by more than 60% between 2021 and 2022, making hi-tech the sector that was hit hardest.
The IVC Research Center report, also published on Tuesday, adds perspective: in 2022, Israeli startups raised $14.9 billion. It was the second-highest amount ever. Here’s the thing, though: the highest investments in Israeli hi-tech ever came in 2021 – just under $26 billion. So, while it’s true that investments in 2022 topped 2020 ($10.5 billion), and 2019 ($7.8 billion), but in a what-have-you-done-for-me-lately market, being half as good as 2021 is, you know, disappointing.
For comparison, in Silicon Valley, investments in technology companies decreased by about 40% in 2022, and a significant decrease was also recorded in the number of fundraising rounds in general, indicating investors aren’t as crazy to invest as they were a year ago. The total number of Silicon Valley capital raising rounds in 2022 was 826 compared to 1,103 the year before.
Most analysts blame Putin. This year’s figures correspond to the global economic crisis that broke out after the Ukraine invasion. The first half of 2022 continued the record year 2021, and then, by the end of the second quarter, the financial markets declined significantly, followed by fear of a deep global recession.
Avi Hasson, CEO of Start-Up Nation Central, had a sobering message for the rest of us, fans of the legendary Israeli hi-tech sector. He told Kan 11 on Monday: “An observation spanning several years reveals that the exceptional year in Israeli tech is 2021 and not 2022. The unrealistic jump in investments, values, and multipliers in 2021 corrected itself, along with macroeconomic trends globally. A significant decrease in investments is evident, with an emphasis on the second half of 2022.”
In other words, if we ignore the unreal results of 2021, the 2022 results may represent a steady, moderate incline from past years.
And if you believe that, why don’t you drop by this afternoon and buy my hardly used, 1973 Dodge Dart? Great pain job.