A new report exposes a few interesting facts about the Israeli tech ecosystem, more specifically regarding venture capital investment in 2020, which - at the beginning at least - seemed to be a living nightmare. After veering into pandemic reality, and realizing that the “end of days” prophecy has not befallen upon us, Israeli high-tech bounced back, even scoring a few major milestones in the process.
Israeli VCs on the rise
According to the report, provided by IVC Research Center and APM & Co., the amount of first investments in Israeli startups climbed to 620, shattering a 7 year high. For comparison, 2019 numbers were uniquely low standing at 470, while Israeli startups saw 579 first investments in 2018.
According to IVC, nearly 65% of first investments landed on startups raising early rounds (Seed and Series A), with a quarter of the investments going to Series B and C rounds, and only 10% funding startups during later rounds (Series D and up).
Chairman of APM & Co., Adv. Yonatan Altman highlighted that later-stage rounds also hit numbers that haven’t been seen in 7 years. “the rise in the number of first investments in early-stage rounds and the recovery observed compared to 2019 brings an excellent indication of increased faith and readiness by the market to carry out earlier stage investments,” noted Altman.
Another encouraging number coming from the report shows an increase in Israeli VC funds' first investments, hiking up 65% between 2014-2020, while foreign firms showed only a 25% increase in Israeli tech first investments over that time. While both Israeli and foreign venture capital firms increased activity in the Israeli ecosystem in 2020, Israeli VCs stayed true to their 2019 numbers by placing nearly half of the first investments (45%).
With a total of 14 first investments in 2020, Entree Capital and F2 Venture Capital took first place, while American VC firm Insight Partners and its $5.8 billion under management came in second alongside Peregrine Ventures with 13 investments. Sharing third place are SIBF and GoAhead Ventures with 11 investments, and U.S.-based Lightspeed scores fourth place with 10 investments. Closing out the top 5 we find a three way tie between JVP, TLV Partners, and Gigi Levy-Weiss’s NFX - with 9 first investments in Israeli startups.