Israeli Startups Break Fundraising Record

Israeli startups broke previous records by raising $1.44 billion in the third quarter of 2017, up 14 percent from $1.27 billion in the preceding quarter, and up 54 percent from $933 million in the corresponding quarter a year ago, Globes reported on Tuesday.

The average financing round was $10 million in the third quarter of 2017, the highest in five years, compared with an average of $8 million and $6.7 million in the preceding quarter and corresponding quarter of 2017, respectively.

A big $250 million financing round completed by Via Transportation, lifted the figures considerably. It was among five deals of over $50 million each last quarter, accounting for 33 percent of the quarterly total.

Shmulik Zysman, managing partner at Zysman Aharoni Gayer & Co., hailed the figures as proof of the health of the Israeli high-tech sector despite gloomy assessments in recent months:

“We’re witnessing yet another report proving the confidence in and status of Israeli high- tech. It seems the effect of the MobileEye deal is not yet run its course. During the third quarter, we noticed the dominant position of Israeli VC funds and the increased investment by foreign VCs compared with the corresponding quarter of 2016. Israeli high-tech continues to be the growth engine of the Israeli economy and its share of GDP is steadily increasing.”

Zysman added that “in August, the Chinese authorities published a new regulatory directive permitting investments outside of China in several sectors, including technology. I believe that this will boost Chinese interest in Israeli high-tech companies in the future.”

IVC Research Center research director Marianna Shapira said, “IVC findings show a decline in the numbers of deals made in the first nine months of 2017. The IVC analysis found that most of this decrease stems from seed and early stage deals (17% decline compared with the five-year average). A reversal is needed in the fourth quarter for the sake of the new ventures and their success as part of the Israeli technology market.”

IVC Research was the source of the data.