Israel Venture Capital Research Center (IVC) has released results of its survey to determine 2011’s most active venture capital funds in Israel.
IVC ranked Israeli and foreign venture capital funds according to the number of first investments made in Israeli and Israel-related companies in 2011. The data are based on information received directly from the VC funds and from IVC Online Database. The ranking reflects the number of deals only, not capital invested.
In 2011, venture capital funds made 140 first investments in Israeli and Israel-related companies. Seventy-three first investments by 23 foreign VC funds accounted for 52 percent of the total number of investments, while Israeli VC funds accounted for the remaining 48 percent. This compares with 31 percent and 69 percent by foreign and Israeli VC funds in 2010, respectively.
The most active VC fund in 2011 was Innovation Endeavors, a foreign VC fund owned by Google Chairman Eric Schmidt, with eight first investments. Pitango, JVP and Sequoia Israel were next with seven first investments each, and Giza and Bessemer followed with six investments. Horizons Ventures, controlled by Li Ka Shing from Hong Kong, and foreign VC funds Access Medical and CP Lantern, made five investments each.
Six foreign VC funds were included within the top four rankings, compared with just two foreign funds in 2010.
In 2011, foreign VC funds made 21 investments in seed companies (40% of seed deals), compared with just four investments in 2010. Access Medical's five investments were all in seed companies. Internet companies attracted 27 investments (37%) the most of any sector investments by foreign VCs, as in 2010. Software followed with 23 investments (32%).
IVC research manager Marianna Shapira said, "Foreign VC fund activity in Israel accelerated significantly in 2011. Foreign VC first investments have doubled since last year. This reflects the general situation in Israeli high-tech capital raising of 2011, where Israeli VC investments reached only 25% of the total, the lowest share in the last decade."
Among venture capital funds' first investments in 2011, seed stage companies accounted for the largest number 53 deals (38% of all first investments). Companies at the initial revenue stage followed with 41 deals (29%).
The Internet sector attracted the largest number of first investments in 2011 46 deals (33%). The software sector followed with 32 deals (23%), while the life sciences and communication sectors shared third place with 23 deals each (16%).
In 2011, Israeli VC funds made 67 first investments (48%), compared with 52 first investments (69%) in 2010. According to the IVC-KPMG 2011 Venture Capital Survey, first investments accounted for 31% of the total amount invested by Israeli VC funds, a slight increase from 29% in 2010 and 2009.
In 2011, seed stage companies attracted 32 (48%) first Israeli VC fund investments, compared with 20 (38%) in 2010. JVP made all of its investments (seven) in seed companies, as did Genesis and Magma with two deals each. Of the 23 Israeli venture capital funds with first investments in 2011, 10 did not invest in seed companies at all. The initial revenue stage was second most attractive for Israeli VC funds with 20 deals (27%).
Internet companies attracted 19 (28%) Israeli VC fund investments, followed by the life sciences with 17 (25%) and communications with 10 (15%). Pontifax and AccelMed, as life science-dedicated funds, made all their investments in this sector. In 2010, Internet attracted 25% of Israeli VC fund first investments, followed by software with 23%, and the life sciences with 16%.
Lool and Glilot are Israeli micro VC funds that made their first investments in 2011, with four and two deals, respectively. Micro-funds manage up to $30 million, invest relatively small sums and generally focus on early stage Internet and digital media start-ups. Israeli micro VC funds raised a total of $87 million in 2011, nearly 11% of total capital raised by all Israeli VC funds.
IVC says that additional details will be available in its 2012 Yearbook, to be published in April.
Published by Globes [online], Israel business news - www.globes-online.com - on March 19, 2012
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