During 2019, there were a vast number of rounds of financing and investment in Israeli tech startups. The number of global investments in Israeli tech startups reached a record last year, amounting to approximately $ 8.3 billion.
In the past decade, Israeli tech startups have raised about $ 39 billion. 2019 contributed $ 8.3 billion to the total amount – nearly a fifth of the amount – in 522 transactions. For comparison, in the early years of the last decade (2010-2019), the number of transactions was closer to 300.
2019, like any of the past few years, broke another record in the total capital increase, showing a significant jump of nearly 30% compared to 2018 – a similar rate to the jump between 2017 and 2018.
The current year 2020 has also continued with the trend of fewer startups raising more capital, and as part of this, there is a decrease in the number of early-stage startups that have managed to raise money.
The initial rounds, i.e., the first round of gathering companies from outside investors, are the only round that has seen a downward trend towards the end of the decade, both in total capital and in the number of transactions. The full money raised in funding rounds in 2019 has been reduced to $ 148 million, compared to $ 169 million in 2018. In contrast, first rounds and subsequent recruitment rounds have continued to grow.
Israeli tech startups
Shmulik Zisman, the managing partner at law firm Zisman-Aharoni-Geyer (ZAG), calls this phenomenon “venture capital with less risk”.
The mega-deals, that is, transactions exceeding $ 50 million each, also broke a record in 2019: 41 mega deals that attracted 50% of the total annual capital. In 2019, there was also an extraordinary number of vast rounds of capital raising – 20 rounds worth $ 100 million and more – an amount that has marked beautiful outlets for years.
The two largest rounds of raising investment and external financing to Israeli tech startups last year involved insurance startups – Lemonade, which raised $ 300 million, and Next Insurance, which raised $ 250 million. Another insurance startup that made the list of the biggest recruiters in the survey is Hippo, which raised $ 100 million – even though it is a startup that only has an Israeli presence in its founders’ identity.
The list has a prominent presence of fintech startups such as Fundbox, which raised $ 176 million, Riskipade, which raised $ 165 million, Blue Wayne ($ 103 million), and Rapid ($ 100 million).
The list also includes two startups that have developed products directly to consumers (as opposed to corporate sales) – an area that over the past decade has been the least designed in Israel:
Monday.com developed a corporate job management system and raised $ 150 million, and Leitrix, which developed apps for editing photos and clips. The video on the smartphone and raised $ 135 million.
“The continuous increase in the amounts invested in these Israeli tech startups is caused by the entry of new investors such as Israeli and foreign private equity funds,” said Jay Holtzman, CEO of IVC. “He believes the trend will continue until the end of 2020 and also in 2021.”
The relative share of Israeli venture capital funds in raising capital has decreased over the past decade, reaching $ 1.1 billion in 2019. This represents 13% of the total – similar to their average share in the past decade.
