Israeli venture capital funds raised $229 million in 2009, 72% less than $803 million raised in 2008, under the impact of the global capital market downturn, the Israel Venture Capital (IVC) reported today. The amount raised last year was the third smallest amount raised in the past decade.
In the 18 years between 1992 and 2009, Israeli venture capital funds raised $13.3 billion, which was exclusively allocated to investments in Israeli start-up and high-tech companies. 70% of this amount, $9.4 billion, was raised in 2000-09.
Only three Israeli venture capital funds completed their fund raising efforts in 2009: Sequoia Capital Israel raised $200 million; TriVentures II raised $25 million for its medical device fund; and Targetech Innovation Center fund Startvest 09 raised $3.7 million. The main investor in TriVentures II is Medtronic Inc. (NYSE: MDT).
IVC CEO Koby Simana, said “Foreign institutional investors - who before the crisis had been the lead source of capital invested in Israeli funds - have suffered serious losses due to the credit crunch. These losses have reduced capital available for investments. The decrease in capital raised by Israeli venture capital funds reflects a global trend. In 2009 for example, US venture capital funds suffered a 48% decrease in their fund raising efforts, compared with capital raised in 2008.”
IVC estimates that Israeli venture capital funds currently have $1.2 billion available for first and follow-on investments. $400 million is earmarked for first investments, and the rest for follow-on investment. It predicts that Israeli funds will raise $500 million during 2010 for investment in Israeli start-up and high-tech companies.
Last month, the Kesselman and Kesselman PricewaterhouseCoopers Israel MoneyTree Report for the Fourth quarter said that venture capital-backed high-tech companies raised $735 million in Israel during 2009, 47% less than in 2008. It noted that only 13 of the 40 venture capital funds active in Israel made investments in companies last year.
Published by Globes [online], Israel business news - www.globes-online.com - on March 8, 2010
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