NETANYA, Israel High technology companies in Israel raised $617 million from venture capital investors – both local and foreign - in the first quarter of the year, the highest amount for seven years.
The investments are 52 percent above the amount raised by 121 companies in the first quarter of 2007, and 23 percent above the previous quarter’s amount raised by 115 companies.
Efrat Zakai, director of research at IVC Research Center (Tel-Aviv, Israel) told EETimes Europe the Q1 2008 success includes eight semiconductor companies, representing 9 percent of the total funding, or $56 million. Communication companies received 20 percent of the funding, or $126 million.
"2008 started exceptionally well, demonstrating the strength of the local high-tech industry," said Zeev Holtzman, chairman of IVC and Giza Venture Capital. However, he cautioned capital raising activity "will probably moderate in upcoming quarters. Yet, we expect that the $1.6 billion average investment level of the last few years will be maintained in 2008."
In the first quarter of 2008, Israeli VCs invested $262 million in Israeli companies, 53 percent more than in the first quarter of 2007 and 84 percent above investments made in the previous quarter (Q4 2007). "We have not seen such high figures since the first quarter of 2001," said Zakai. "The quarter was characterized by a high level of investment by Israeli VCs, as six funds each invested more than $15 million."
First investments accounted for 42 percent of total dollar investments by Israeli VCs in Q1, compared with 51 percent in the first quarter of 2007 and 33 percent in Q4 2007. The average first investment by Israeli VCs was $2.6 million, while the average follow-on investment was $1.2 million.