Israeli tech firms raise close to $18 billion in 2021 handing another defeat to boycott Jews (BDS) movement

This amount is more than double the 2020 total, and we still have three months left in 2021. In addition, Israeli high-tech exits in 2021 have registered record figures, with 180 transactions valued at $18.92 billion. The majority of the capital volume was derived from the 65 Israeli high-tech IPOs so far in 2021. And Israeli exports are also reaching new heights, as they are projected to reach $135 billion in 2021. A staggering 24% increase from 2020. Despite the vicious attacks from the BDS Movement, Israel’s economy is absolutely flourishing. #BDSFail!

Israeli tech firms raised staggering $17.8b this year, almost double 2020 total

Funding rounds of over $100m account for more than half the total sum for first 3 quarters of 2021; tech exits reach over $18b

Israel’s tech sector once again broke capital-funding records, with firms raising a total of $17.78 billion in 575 deals since the start of 2021, almost double the total raised in all of 2020, itself a record year.

In the first three quarters (Q1-Q3) of 2021, the amount of capital raised by Israeli high-tech companies increased by 71 percent over 2020’s annual total of $10.3 billion, according to data released Wednesday by the IVC-Meitar Israel Tech Review, published by the IVC Research Center and the law firm Meitar. The historic amount was due in part to a significant number of funding rounds of over $100 million — 53 such deals — which accounted for a 51% share of the total sum for Q1–Q3, according to the report.

In Q3 alone, Israeli companies raised $5.89 billion in 177 deals, down slightly from the $6.5 billion raised in Q2 but more than the $5.3 billion in Q1.

The number of deals also reached an unprecedented level. According to IVC’s estimation, the projected deal number by the end of the year will reach 1,800, a 33% gain over 2020.

In addition, the value of high-tech exits soared so far this year, reaching $18.92 billion — up 92% from 2020’s annual results. According to the findings, this is mostly due to a surge in IPOs, 65 in total.

“We observed the current upward trend since March 2021, leading monthly averages in Q1–Q3/2021 to $1.98 billion, compared to a $864 million monthly average in 2020, as more mature Israeli companies have established trusted connections with their foreign investors, proving themselves as stable targets for growth investments. We believe that at least for the near term, this trend will continue,” said Mariana Shapira, senior analyst at IVC, in a statement accompanying the report.

Mega rounds

Funding rounds of $100 million or more defined the first three quarters of 2021, with an exceptionally high number of such “mega-rounds” accounting for $9 billion of the $17.78 billion in this period. This can be attributed to the growing number of unicorns — private companies valued at over $1 billion — in the Israeli tech industry, the report said.

These rounds include recent investments in fintech startup Melio, which raised $250 million at a $1.4 billion valuation, global payroll and payment management platform Papaya Global with a round of $250 million at a $3.7 billion valuation, and internet of things (IoT) firm Wiliot, which raised $200 million in July with SoftBank.

Funding rounds of $50 million or over were also up this year so far, with 114 such deals in Q1-Q3, compared to 22 in the first three quarters of 2020.

Early rounds (seed and A), meanwhile, reached 293 deals so far, compared to 343 in all of 2020.

Later rounds reached $15.3 billion, or 85% of the total money raised, in 282 deals.

Investments by sector

Cybersecurity companies drew the largest investments in 2021 so far, bringing in over $4.5 billion in funding, with fintech firms not far behind with $4.4 billion.

IoT startups raised over $2 billion in Q1-Q3, and food tech outfits nabbed $480 million so far.

“We see the continued effect of COVID-19 on our lives. The technology sector accelerated with the world digitizing and transitioning to cloud in all areas, along with the increased demand for cyber solutions,” said Shira Azran, a partner in Meitar Law Offices. “In addition to the continued growth of mature companies, we see two main trends – first, the increase in early-stage and seed rounds, and second is the increased participation of US investors, in all stages of investments in Israeli companies. We expect these trends to continue for the remainder of this year and next year.”

nvestors

Indeed, foreign investors increased their funding in Israeli companies gradually after a slight decrease in participation in the last two quarters of 2020. Foreign investors poured in over $12 billion in Israeli firms so far in 2021, with Israeli investors accounting for the rest.

In Q3 alone, foreign investors put in $4.3 billion, compared to the quarterly average of $1.86 billion in 2020.

Foreign investors were also more involved in later funding round (B and up) with Israeli investors participating in the earlier stages.

Follow-on investments also continued to climb through 2021, reaching record figures of over $8 billion.

This is “evidence of the continuing increase in local start-up valuations and the investors’ belief that these valuations will keep soaring,” according to the report.

Exits

So far in 2021, Israeli high-tech exits registered record figures with 180 transactions valued at $18.92 billion, according to the IVC report. A majority of the capital volume was derived from IPOs – 52% of the total amount.

In Q1–Q3 of 2021, 65 Israeli high-tech companies went public on capital markets with a total amount of $9.78 billion, “a 225% increase in number and a 506% increase in capital from 2020’s annual figures,” the report noted. Their overall post-valuation reached $76.4 billion.

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Author: Geller Report Staff


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