402 Israeli high-tech companies raised $1.62 billion from local and foreign venture investors in 2006, 21% more than the $1.34 billion raised in 2005 and 11% more than in 2004, say the IVC Research Center and Israel Venture Association (IVA) in their joint Quarterly Survey. 105 Israeli high-tech companies raised $477 million in the fourth quarter of 2006, 25% more than the $381 million raised by 87 companies in the third quarter and 80% more than the $264 million raised in fourth quarter of 2005.
73 companies raised more than $1 million each in the fourth quarter. Of these, eleven companies raised $5-10 million each, eight companies raised $10-20 million each, and five companies raised more than $20 million each. The average company financing round was $4.5 million, compared with $4.4 million in the previous quarter and $3 million in the fourth quarter of 2005.
The high-tech boom last year did not translate into a boom in venture capital investment. The Quarterly Survey said that, in 2006, Israeli venture capital invested $651 million in Israeli high-tech companies, compared with the $655 million invested in 2005 and the $665 million invested in 2004. The Israeli venture capital share of the total amount invested in Israeli high-tech companies was 40%, compared to an average of 43% in the previous seven years and 49% in 2005. The remainder came from other investment entities, mostly foreign.
Giza Venture Capital and IVC Research Center chairman Zeev Holtzman said, “Capital raised by Israeli high-tech companies in 2006 was the highest in five years. Foreign participation in investments in Israeli companies increased in 2006, since Israeli high-tech is regarded as a material part of the global technology sector, prominent even against the growing activity in China and India. We therefore expect foreign investment in 2007 to remain similarly high.”
Published by Globes [online], Israel business news - www.globes.co.il - on January 22, 2007
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