2007 is shaping up to be a good year for Israel's venture capital industry says the latest report by Ernst & Young and Dow Jones's VentureOne.
VentureOne says that 168 venture capital investments totaled $1.3 billion were made in Israeli start-ups in January-November 2007. In addition, the value of exits by Israeli companies, either through IPOs or by sale, totaled $3.5 billion, 30% more than the $2.7 billion in 2006, and 58% more than the $1.7 billion in exits in 2005. These figures refer only to venture capital-backed companies, and do not include mergers and acquisitions of public companies, such as Spansion Inc.'s (Nasdaq:SPSN) takeover of Saifun Semiconductors Ltd. (Nasdaq:SFUN) earlier this year, or the sale of Mercury to Hewlett Packard Co. (NYSE:HPQ) and m-systems to SanDisk Corporation (Nasdaq:SNDK) in 2006.
Ernst & Young Israel senior partner Oren Bar-On noted that IPOs accounted for 57% of exits of Israeli start-ups in 2007, with M&As accounting for the rest. In 2006, 86% of exits were through M&As and just 14% were by IPO.
VentureOne states that IT continued to attract the most venture capital in 2007: $992 million, 76% of all investment. $256 million was invested in 32 life sciences start-ups, 20% less than the $332 million invested in 36 life sciences start-ups in 2006. Investment in life sciences start-ups accounted for 20% of total venture capital investment in Israel start-ups, compared with 35% in the US, a sharp increase over last year.
Investment in Israeli cleantech start-ups increased substantially this year, with seven companies raising $38 million, 65% more than the $23 million raised by three companies in 2006.
Published by Globes [online], Israel business news - www.globes-online.com - on December 16, 2007
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