Bally Technologies acquires DragonPlay for $100m
IVC CEO Koby Simana: Venture capital funds are facing serious challenges today, not just in Israel but the world over.
Israeli venture capital funds raised $607 million in 2012, down 30% from the previous year, according to research released today by IVC Research Center and KPMG Somekh Chaikin Israel. Among the leading funds, Sequoia V, Pitango VI and Magma III raised a combined sum of $450 million, 74% of the total.
The research shows that micro-VC funds continued to attract investment, with six micro funds raising a total of $83 million, nearly 14 percent of total capital raised. Four of the 12 VC funds that raised capital during 2012 were new to the local VC management scene. This compares with eight new players in 2011.
Ofer Sela, a partner in KPMG Somekh Chaikin’s Technology group, explains that “Fund raising is mostly being carried out by the large VCs that are initiating follow-on funds and on the other end relatively small funds that are industry specific and/or early stage focused. There are VCs in-between that are no longer attracting new funds. These fund raising trends are similar to those in the US VC industry.”
"There is a major debate in the industry regarding the optimal fund size that will result in the highest returns to limited partners," Ofer added. "As a consequence, we are witnessing VCs reducing the size of their new follow-on funds in an attempt to maximize returns. Overall, during the last two years, the number of investment entities making investments in Israel has been on the rise, with most focused on the early stage. We believe that later stage funding will be available to the relevant portfolio companies either from corporate VCs or from foreign VCs operating in Israel," he said.
IVC CEO Koby Simana said, "VC funds are facing serious challenges today, not just in Israel but the world over. The allocation for venture capital investments continues to decline among institutional investors. On top of that, Israeli VC funds are being challenged by fund raising competition from Asian VC funds mainly from China and India. There's room for optimism, however. While, on average, funds are raising less, the number of VC-backed companies is likely to rise over the next few years as more VC funds begin to raise capital."
Between 2003 and 2012, Israel’s venture capital funds attracted $6.77 billion. The capital available for investment by Israeli venture capital funds at the beginning of 2013 was approximately $2.1 billion. Of this amount, $484 million (23%) is earmarked for first investments, with the remainder reserved for follow-on investments. According to IVC projections, Israeli VC funds will raise $600 million in 2013.
Additional details about venture capital fund raising will be available in the IVC 2013 Yearbook, to be published in April.
Published by Globes [online], Israel business news - www.globes-online.com - on January 28, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013
You comment was recieved and soon will be published.
Thank you for posting your comment, which will be reviewed for publication.
Load more comments
The company's casino-style games are designed for Android, iPhone, and Facebook platforms.
Cyber security co CyberX raises $2m
Glilot Capital Partners led the funding that will be used to develop technology to protect industrial Internet networks.
SingTel in talks to buy Kontera for $160m - report
Singapore Telecom is in advanced talks to buy the digital ad company, "The Wall Street Journal" reports.
Will.i.am mulls investing in five Israeli start-ups
The Black Eyed Peas rapper met in Tel Aviv with representatives of the start-ups.
Big data security analytics co Fortscale raises $10m
Intel Capital and Blumberg Capital led the financing round.
Billion dollar question: Exit or big company
Should entrepreneurs prefer a quick buck over a lifetime project?
Where biotech and high-tech meet
Executives in Israel for the MIXiii conference tell "Globes" about the future of medicine.
Start-ups boost big technology cos
Everyone wins when a big company acquires a start-up.
Where have all the VCs gone?
Israeli venture capital accounts for a shrinking share of high-tech investment here.
Smartup: Tips for beginners
4 investors and entrepreneurs reveal some tricks of the trade.
Crowdfunding is the key
More technology entrepreneurs are seeking to raise capital on sites like Kickstarter.
The incubator effect
Three incubators will assist the "Globes"-Bank Hapoalim smartup2 competition.
Copyleaks hunts the plagiarizers
Copyleaks has a free web service, but targets the legal, publishing, and academic markets.
Kaltura aims to be world's biggest video technology co
CEO Ron Yekutiel: The idea is to combine Wikipedia with YouTube.
Start-up entrepreneurs are older than you think
A "Globes"-Terra Venture Partners survey found 1,000 start-ups were set up in 2013.
Incubator CEO fled law career for high tech
Esther Barak-Landes left a promising law career to found Nielsen's incubator.
Amazon, Google, Microsoft battle to host developers
The Internet giants want to attract developers to build apps on their cloud-computing infrastructures.
AR: Technology that cares
InfinityAR CIO Helen Papagiannis: Augmented reality will change our world for the better.
JDate founder seeks fresh start
Joe Shapira lost his JDate fortune in US real estate. Now he's back in the dating game.
Dov Moran: Windows 8 deserves to disappear
Moran talks about his investment portfolio, and slams Microsoft's lack of innovation.
"You can't teach entrepreneurship"
Angel investor Zohar Gilon relies on his own judgement rather than due diligence when selecting investments.
Waze CEO: We're completely different from Google
Noam Bardin says Waze is different from Google in how much it trusts users and how it builds data.
Nielsen Innovate recruits first six start-ups
The Nielsen Company has launched its incubator in Caesarea in partnership with Igal Ahouvi.
Wanted: Arts majors for high-tech
Technology companies are looking for creativity, flexibility, and the ability to think outside the box.
2013 boom year for Israeli high-tech
In the first half of the year, there was a 52% rise in demand for mobile and web developers, and salaries are up as well.
Merck Serono Israel incubator nurtures early stage projects
Merck Germany head of pharmaceuticals Dr. Stefan Oschmann says R&D is enjoying a renaissance at big pharma companies.
Alcobra has had two successful Nasdaq offerings this year as it develops an ADHD treatment with fewer side effects.
Israel offers favorable tax regime for companies
"Globes" and Baker Tilly Israel accountants found Israel's tax benefits are among the most attractive in the West.
Enabling diabetes patients to sleep soundly
Excess insulin levels can be fatal when they occur at night. NightSense aims to remove the fear.
CyberArk reboots network security
CEO Udi Mokady: Media reports on electronic surveillance make explaining our product unnecessary.