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March 22, 2021 1:44 pm

First Investments by Global VC Funds Into Israeli Tech Firms Jump to Seven-Year Record Amid COVID-19

avatar by Sharon Wrobel

Participants at the DLD Tel Aviv Digital Conference, Israel’s largest international high-tech gathering, held at the Old Train Station complex in Tel Aviv on Sept. 6, 2017. Photo: Miriam Alster/Flash90.

Israeli technology companies last year attracted the highest number of first investments by venture capital funds in seven years, despite the global crisis caused by the outbreak of the coronavirus pandemic, the IVC Research Center reported on Monday.

The number of first investments in Israeli tech companies jumped to 620 first investments in 2020 after recording a decline in 2019. The data published by IVC Research and law firm APM & Co., which have been analyzing first investments activity in Israeli tech firms since 2014, showed that the number of first investments amounted to 470 in 2019, 579 in 2018, and 439 in 2014.

Foreign VC funds also added more Israeli tech companies to their investment portfolio. A breakdown of the data unveiled that the number of first deals by foreign VC funds was the highest in seven years, with a total of 339 investments. The number of first investments by Israeli VCs in 2020 was also the highest in seven years, totaling 281.

The number of first investments by foreign VC funds in 2020 accounted for 55% of the total of all first investments during the year. According to IVC findings, Israeli VCs invested on average in three new tech companies in 2020, compared to 1.6 firms per foreign VC fund.

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“In 2020, we saw an increase in VC funds activity, despite the restrictions and difficulties during the epidemic,” said Marianna Shapira, Research Manager at IVC. “This increase reflects the resilience of the Israeli tech ecosystem as a leading sector in the Israeli economy.”

Two Israeli VC funds — Entrée Capital, with $345 million under management, and F2 Venture Capital, with $140 million under management — were ranked as the most active funds in 2020, with 14 first investments each. In joint second place came American private equity and venture capital fund Insight Partners, with $5.8 billion under management, and Israel’s Peregrine Ventures, with $333 million under management, with 13 first investments each in 2020.

South Israel Bridge Fund (SIBF), with $155 million under management, came in joint third alongside the American GoAhead Ventures VC fund, with $110 million under management. Both made 11 first investments each in 2020.

The IVC is a provider of data and analyses on Israel’s high-tech, venture capital, and private equity industries, and has a database of over 9,570 Israeli technology startups. According to its website, its information is used by key decision-makers, strategic and financial investors, government agencies, and academic and research institutions.

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