The latest Kesselman and Kesselman PricewaterhouseCoopers Israel MoneyTree report shows investments in Israeli start-ups totaled $206 million in the second quarter of 2010, up 21% from the preceding quarter, and up 27% from the corresponding quarter of 2009.
Total investments in Israeli start-ups in the first half of 2010 amounted to $376 million, a slight rise over the $356 million invested start-ups in the first half of 2009.
The upward trend was led by the medical devices and biotech sectors, while investments in Internet start-ups bounced back to the levels of recent years after low levels of investment in the first quarter of 2010.
The Report also reveals that 60 Israeli high-tech companies raised capital in the second quarter of 2010, compared to 72 in the preceding quarter and 61 in the corresponding quarter of last year. The average investment per company in the quarter under review was $3.4 million, compared with $2.4 million in the preceding quarter and $2.7 million in the corresponding quarter of last year.
The data reflects the highest level of investment since 2004 in the life science section (which combines medical devices and biotechnology). The internet sector returned to the investment level of the last few years, following a weak previous quarter. Investments in seed stage companies went down, while investments in more advanced stages, and in particular later stage were up. This is particularly interesting given the renewed growth in early-stage investments in dollars.
Despite the rise in investments not all indicators in the latest MoneyTree report are encouraging. There is for example a fall in seed investment in early-stage start-ups.
Rubi Suliman, a partner in the High-Tech Assurance Practice at Kesselman and Kesselman PwC Israel, said, "The rise is relatively modest compared with the parallel rise in the US. The industry is certainly troubled but it is too early to eulogize venture capital. We can see many positive signs for continued growth in investment in 2010."
Published by Globes, Israel business news - www.globes-online.com - on July 26, 2010
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