October 24, 2012, 10:14 AM GMT–TEL AVIV—Two reports published by rival consulting firms reveal the state of start-up investments in Israel. While venture capital-funded deals are declining, and VCs are finding it hard to raise funds, overall funding in Israel remains buoyant, with other sources of money filling the gaps left by VCs.
The Kesselman & Kesselman PricewaterhouseCoopers Israel MoneyTree report focuses on VC-backed deals. According to the report, VC funding in Israel fell dramatically in the last quarter, down 33% between the second and third quarters of 2012, and down 35% year-to-date compared with 2011.
The report found 52 Israeli high-tech companies raised a total of $171 million in VC funding in the third quarter of 2012, compared with 59 in the preceding quarter and 44 in the corresponding period last year. The average investment per company in the quarter under review was $3.3 million, down from $4.3 million in the preceding quarter and $4.5 million in the corresponding quarter of last year.
The IVC and KPMG Report has a different approach, and looks at the total investment space, including VC deals but also including other sources of revenue such as angel funds and private investments. It paints a much healthier picture.
The IVC and KPMG Report found that in the third quarter of 2012, 144 Israeli high-tech companies raised $488 million from venture investors – both local and foreign. This is an 8% increase from $453 million raised by 128 companies in the second quarter of 2012, but 7% below the $522 million raised by 137 companies in the third quarter of 2011…Read More>>