MoneyTree. MoneyTreeTM. Report

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Gervais Holt
6 years ago
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1 TM TM VC investment up 34% compared to the parallel quarter last year Some $3 million invested in VCbacked hitech companies in the first quarter of 15 Up from $232 million in the corresponding quarter The PwC Israel for the first quarter of 15 Tel Aviv, Israel June 3, 15 Venture capitalbacked hitech companies (in which at least one investor in a funding round is a venture capital fund) raised $3 million in Israel during the first quarter of 15, up from $232 million in the corresponding quarter last year and a 28% decrease from $433 million in the previous quarter, according the latest PwC Israel. The report also indicates that 31 Israeli hightech companies raised VC funding in the first quarter of 15, compared to in the preceding quarter and 38 in the corresponding quarter of last year. The average investment per company in the quarter under review was $1 million, down from $1.8 million in the preceding quarter and up from $6.1 million in the corresponding quarter of last year. During the current quarter, $2 million, 84% of the total quarterly investment, was invested in deals of over $1M, compared with $33 million (76%) invested in 1 deals in the previous quarter and $1 million (52%) in 7 deals in the first quarter of. Rubi Suliman, Partner, coleader of PwC Israel's hightech practice, One of the most noticeable data in this report is the fact that 84% of the money invested goes to rounds of $1m or more. This directly continues in which 76% was invested in over$1m rounds. That result is a bulge in average investment per company in those two quarters. Rubi Suliman, PwC Israel's hightech practice leader Those data are very characteristic of markets with very high liquidity levels, which allow growing companies to have much more significant capital rounds than previously and the preference of large funds to make more significant investment rounds in those companies in attempt to create unicorns. While it is clear that different times dictate different investment strategies, it seems that this strategy is in fact a return to the way in which venture capital funds. PwC Israel I 15 TM

2 Total annual investment 8 15 (in millions $) Total quarterly investment (in million $): Number of investments Average investment per company (in millions $) Average investment per company (in million $): 15 TM

3 % of funds making no investment 24% 35% 26% % 34% 32% 36% 42% 46% 46% 43% 39% 34% 41% 52% 32% 46% 45% 51% 42% 38% 32% 36% 31% 34% 45% 41% % of funds making no investment Investments made during corresponding quarter (in millions $) Total quarterly investment (in million $): Number of investments Total quarterly investment (in million $): Number of investments Analysis by Geographic Location of Company Registration In addition to investment in hightech companies with operations in Israel, local venture capital funds also invested approximately $ million in 2 overseas hightech companies that are not engaged in operations in Israel. Companies Receiving Grants from the Office of the Israel Chief Scientist 3 companies, representing 7% of all companies raising VC capital in the first quarter of 15, are supported by the Office of the Israel Chief Scientist. Some $25 million (8%) of total investment funds went to these companies. 15 TM

Companies Receiving Grants from the office of the Israel Chief Scientist 15 (in millions $) 6 75 66 65 7 36 21 53 35 26

made during corresponding quarters: 61 281 333 31 44 154 186 8 21 4 38 217 19 152 167 384 1 7 3 8 1 1 21 2 79 97 51 52 46

4 Companies Receiving Grants from the office of the Israel Chief Scientist 15 (in millions $) Total quarterly investment (in million $): Number of investments Investments made during corresponding quarters: % % % 43% % 29% 18% 22% 22% % 15% 17% % % % 9% 7% Initial Followup % initial $ of total investment 15 TM

5 Analysis by Leading Technological Sector Total annual Investment by sector 15(% of total $ invested) % 45% % 35% 3 25% % 15% 1 5% 15% 19% % 8% 31% Communications and Networking 43% 41% 34% 33% 3 31% 27% 23% 21% 22% 22% 17% 18% 16% 16% % % % 1 % 9% 9% 9% 6% 6% 4% 2% 3% 3% 3% 4% Software Internet Semiconductors Life Sciences Cleantech Miscellaneous 15 Communications and Networking sector Software sector (in millions $) 15 Total Investments Number of Companies Total Investments Number of Companies TM

6 Analysis by Leading Technological Sector Internet Sector Semiconductors Sector Total Investments Number of Companies Total Investments Number of Companies Life Sciences Sector Miscellaneous Sector Total Investments Number of Companies Total Investments Number of Companies TM

Analysis by Leading Technological Sector Cleantech

Cleantech, and Networking, Semiconductors, Life

Total Investments 26 1 22 2 8 16 22 6 62 25 1 5 8

7 Analysis by Leading Technological Sector Cleantech sector Total Investment by sector 7 Communications Cleantech, and Networking, Semiconductors, Life Sciences, 22% Software, 34% 3 1 Internet, 43% 15 Total Investments Number of Companies TM

8 Analysis by Investment Round Total annual Investment by Investment Round 15 (% of total $ invested) % % 51% 49% 47% 49% % 3 % 1 32% 26% 29% 31% 39% 24% 3% 15% 21% % 25% 33% 19% 34% 4% 3% % 6% % 15% Early Round Third Round Later Round Bridge Loan 15 Early round Third round Total Investments Number of Companies Total Investments Number of Companies TM

Later Round Bridge Loan 15(in millions $) 2 1 3 1 Total Investments 15 16 52 42 95 65 95 43 51

18 21 46 26 31 25 15 55 28 19 Number of Companies 35 3 15 17 19 16 19 16 17 18 1 1 9 7 Total

9 Later Round Bridge Loan 15(in millions $) Total Investments Number of Companies Total Investments Number of Companies Total Investment by Investment Round Bridge Loan, 4% Later Round, 25% Early Round, 32% Third Round, 39% 15 TM

10 Analysis by Company Development Stage Total annual Investment by Development Stage 15 (% of total $ invested) % % % 51% 44% 45% 44% % 3 26% 29% 27% 3 34% 34% 31% 37% 3 % 16% 1 4% 9% 7% 8% 8% 6% 5% 1% Seed/Startup Stage Early stage Expansion stage Later Stage 6% 15 Seed Stage 15(in millions $) Intermediate stage Total Investments Number of Companies Total Investments Number of Companies TM

Analysis by Company Development Stage Later Stage Total Investments 93 46 45 7 1 74 4 32 19 2 2 172159 2 Number of Companies 7 5 9 4 2 7 8 4 7 6 3 2 3 17 5 2 15 1 1 Split of the Intermediate stage

11 Analysis by Company Development Stage Later Stage Total Investments Number of Companies Split of the Intermediate stage between early and expansion stage Total Investment by company development stage Later Stage, 1% Seed/Startup Stage, 4% % 9 8 Expansion stage, 27% 7 % % % Early stage, 68% 3 % 1 15 Expansion stage Early stage 15 TM

12 The is published quarterly by Kesselman & Kesselman PwC Israel, in conjunction with the reports published in the United States and Europe by the global accounting, tax and consulting firm, PricewaterhouseCoopers. This quarter, 33 venture capital firms participated in the production of the. The findings of the are widely used each quarter by Israeli and foreign venture capital funds, commercial banks, investment banks and other financial institutions both in Israel and abroad, hightech companies, government departments, the Office of the Chief Scientist and others. The measures investments by the professional venture capital community in private emerging hitech companies in Israel. The information presented in the report includes investment rounds in Israeli hitech companies or Israeli related (companies that are incorporated outside of Israel, but were founded by Israeli founders with R&D subsidiary in Israel), with at least one VC participating in the financing round. The VC's that are included are all Israeli VC's or foreign VC's that have at least one partner in Israel. The information is mostly reported to us by the VC's and other reliable sources and is verified prior to its inclusion in the report. For further information Rubi Suliman Partner, Hitech leader, PwC Israel Office: Rotem Geslevich Head of Hi Tech Business Development,PwC Israel Office: Tamar YaronMoldovan Manager, Hi Tech Business Development,PwC Israel Office: Kesselman & Kesselman. All rights reserved. In this document, PwC Israel refers to Kesselman & Kesselman, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity. PwC Israel helps organisations and individuals create the value they re looking for. We re a member of the PwC network of firms in 157 countries with more than 195, people who are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Kesselman & Kesselman, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. 15 TM

Q 1. MoneyTree. MoneyTreeTM. Report

Q 1. MoneyTree. MoneyTreeTM. Report www.pwc.com/il TM TM Q 1 Increased average investments in seed stage Some $232 million invested in VCbacked hitech companies in the first quarter of up from $196 million in corresponding quarter last year