Israeli venture capital-backed start-ups raised around $178 million in the third quarter of 2009, 10% more than in the $162 million raised in preceding quarter, but 55% less than the $393 million raised in the third quarter of 2009, according to the MoneyTree Report for the Third Quarter by Kesselman & Kesselman PricewaterhouseCooper Israel.
55 Israeli start-ups raised capital during the third quarter, down from 61 start-ups during the preceding quarter and 78 during the corresponding quarter. The average investment was $3.2 million during the third quarter, up from $2.7 million during the preceding quarter, but less than the $5.1 million during the corresponding quarter.
Venture capital investment in software plummeted to a low of more than ten years in the third quarter. In contrast, investment in life sciences start-ups was higher than in previous quarters, and reached its second highest level in the past four years. $27 million was invested in cleantech start-ups.
Kesselman & Kesselman high-tech practice partner Robi Suliman said, "The present survey strengthens the conclusion that the current crisis in high-tech is far from over. The level of investment during the quarter was one of the lowest for the decade. Moreover, a thorough analysis of the data indicate that investment by Israeli venture capital funds fell to $70 million in the third quarter, the lowest amount since the low point in the first quarter of 2003. The increase in investment in the third quarter was entirely due to investment by foreign funds.
"Another interesting figure is the sturdiness of the life sciences sector, especially of medical devices, which raised the most capital during the quarter. This figure, combined with the fact that this sector had the largest exits in the past year, demonstrates the great strength and importance of the industry in Israel and its soundness even in hard times."
Published by Globes [online], Israel business news - www.globes-online.com - on November 3, 2009
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