High-tech start-ups in Israel raised $569 million during the second quarter, Reuters reported, citing a report from the Israel Venture Capital Research Center. The amount was up 19% from the first quarter and up 66% from a year earlier, Reuters wrote. This Israel Venture Capital Research Center attributed the jump to increases in mid and late-stage investments.
(Reuters) – Israeli high-tech companies raised $569 million in the second quarter, the highest quarterly amount in two years, the Israel Venture Capital (IVC) Research Center said on Wednesday.
The amount raised from local and foreign venture funds was up 19 percent from the first quarter and up 66 percent from a year earlier, IVC, in cooperation with the Israeli office of consultancy KPMG, said in a report.
“High-tech capital raising in the first half of the year almost doubled from the first six months of 2010,” said Koby Simana, CEO of the IVC Research Center.
“The increase largely reflects a major jump in mid to late-stage investments … We believe that investor support during a company’s expansion and marketing stages is crucial and evidence of strength and maturity in the high-tech sector.”
Israel’s technology companies are key drivers of the economy, helping to spur growth of 4.7 percent in 2010.
However Ofer Sela, a partner in KPMG’s technology group in Israel, said there was a crisis in Israel’s own venture capital fund sector, where a significant number of funds are struggling to raise new and follow-on funds.
“This is demonstrated by the low level of seed investments made during the last 12 months compared to the seed investments made in 2007, the year in which most Israeli VCs raised their last fund,” he said.
The internet sector attracted the largest share of funds in the second quarter at 30 percent of capital raised, followed by communications with 21 percent and the life sciences with 19 percent.
(Reporting by Tova Cohen; Editing by David Holmes)