Israeli High-Tech Raises $1.19 Billion

Israeli high-tech companies raised a total of $1.19 billion in the third quarter of 2016, the second highest quarterly amount in 10 years. The amount was significantly affected by the exceptional Ormat PIPE deal of $204 million, which captured 17 percent of total capital raised. Excluding the Ormat transaction, the quarterly results stand at $982 million, similar to the $1 billion quarterly average raised in the past three years. IVC-KPMG Survey findings presented only 142 funding deals closed in the third quarter of 2016, a 26 percent drop from Q2/2016 numbers (193 deals) and 17 percent below the three-year quarterly average of 171 rounds per quarter. Since the beginning of 2016, Israeli high-tech companies raised a total of $4 billion in 510 deals, 27 percent above the $3.15 billion raised in 491 deals in the first nine months of 2015, and only 7 percent below 2015’s record of $4.3 billion. The average transaction reached $7.8 million, a noticeable increase, compared with the $6.4 million average in Q1-Q3/2015. In the third quarter of 2016, the average company financing round stood at $8.4 million, or – controlling for the Ormat deal – $7 million, far above the three-year average. Koby Simana, CEO of IVC Research Center says, that IVC noticed a drop in foreign investor participation in Israeli technology capital raising, particularly by foreign VC funds, in rounds closed during the third quarter. “This is a reflection of the global downtrend in VC investment that has been going on for over a year. Venture capital investors have put on the brakes in nearly every country, with US capital raising, for example, declining for the fifth quarter in a row. In Israel, we have so far been going against this trend, exceeding former capital raising records. Thus, this drop in the number of deals involving foreign VC funds is not entirely unforeseen. However, we need to wait for the fourth quarter results in order to determine that Israeli market is indeed following the global tendency.