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Increase in the Value of Venture Capital Investments in Israel in 2014 YTD – August 2014

by Emily Forbes

  • 21 Aug 2014
  • PE
  • VC

Preqin’s Venture Deals Analyst shows that since 2007 there have been 786 venture capital investments in Israel, with an aggregate deal size of $4.9bn. The first half of this year witnessed the largest semi-annual aggregate deal value in the region since 2007, with $432mn invested in Israel via 57 venture capital financings. Furthermore, despite the current difficult political situation in the region, the second half of 2014 is set to record an even higher aggregate value with $401mn invested in the country in the first seven weeks of H2, largely due to a $150mn round of investment in Israel-based taxi app Get Taxi, Inc., announced last week. Vostok Nafta Investment contributed $25mn towards the round with the remainder raised from undisclosed investors.

The most common industry in Israel for venture capital financing so far this year is software, with 20 venture capital deals occurring with an aggregate deal size of $260mn, which also represents the highest aggregate value in the country since the start of this year. Software accounts for 27% of the number and 31% of the value of venture capital financings in Israel in 2014 YTD. The second most prominent industry is telecoms, with $225mn invested via 17 financings, equating to 23% of the number and 27% of the total value of venture capital deals. It is worth noting that combined software and telecoms industries in Israel account for half of the number of venture capital deals and 58% of the aggregate value so far this year, compared with 49% and 33% respectively in 2013. Healthcare, the third most prominent industry in Israel with regards to venture capital financings, contributed 14% of the number and 16% of the value of deals in 2014 YTD, a one and seven percentage point increase respectively on the previous year’s proportions, with the average deal size increasing from $6mn to $13mn.

Angel/seed rounds contributed to over a fifth of all deals that have occurred in Israel in 2014 YTD, which is a higher percentage than any other year since 2007. Series A and series B rounds represented 14% and 10% respectively of all Israel-based deals in 2014 YTD. At $278mn, series D and later rounds represent 33% of the aggregate deal value of all Israel-based deals so far this year, the highest proportion with regards to the total value of venture capital financings in the country in 2014 YTD.

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