A record-breaking $1.44 billion was raised by 144 Israeli high-tech companies in the third quarter of 2017, according to a report from the Tel Aviv-based IVC Research Center.
Capital-raising in Q3/2017 showed an increase of 14 percent over the $1.27 billion raised in Q2/2017, and a 54% surge from $933 million raised in Q3/2016.
The exceptional late round by Via Transportation of $250 million boosted the Q3/2017 results upward, according to the report.
The average financing round was $10 million in Q3/2017, the highest amount in five years, compared with an average of $8 million and $6.7 million in Q2/2017 and Q3/2016, respectively. Five deals of more than $50 million each were made in Q3/2017, accounting for one-third of the quarterly total.
VC-backed deals in Q3/2017 accounted for the largest quarterly amount in the past five years, with $1.2 billion raised in 89 deals. The VC-backed share of total capital increased steadily throughout the first three quarters of 2017 to 84% in Q3/2017, compared with 67% in Q3/2016.
In the first nine months of 2017, Israeli high-tech companies raised a record amount of $3.8 billion, but the number of deals – 457 in total – declined to the lowest number in the past five years due to a decrease in seed- and early-stage deals.
Some 43% of the total capital ($618 million) raised specifically in Q3/2017 was invested in late-stage companies, according to IVC.
“The trend of investing larger amounts in fewer companies indicates that investors have an appetite for greater risk,” commented Shmulik Zysman, managing partner at the Israel-based international law firm Zysman Aharoni Gayer & Co.
“During Q3/2017, we identified the dominance of late-stage deals, but it seems that younger companies have not been adversely affected. Early-stage companies are attracting investors’ attention and capital. It is clear that foreign investors see Israeli high-tech as a source of innovation and investment opportunities,” Zysman said. “Israeli high-tech continues to be the growth engine of the Israeli economy and its share of GDP is steadily increasing.”