Tech Funding Report · Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4...
Transcript of Tech Funding Report · Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4...
Capital raising analysis,
trends and insights
Q1/2020
Israel
Tech
Funding
Report
1
2
2020 is, so far, proving to be a major challenge for Israel’s high-tech industry. The COVID-19 crisis has caused businesses to cease regular activity and search for ways to survive this uncertain period. The first to suffer from the global recession in the Israeli high-tech industry were young seed companies, with only four capital-raising deals made since February.
The first two months of this year showed mostly regular activity, with quarterly figures at the same levels as previous, strong months. In March 2020, the prevalent trend from 2019 has strengthened – investor interest in later rounds and mature companies– became even more prominent.
Growth-stage companies succeeded in raising robust amounts. Four of the eleven companies that attracted more than $50 million this quarter raised notable amounts in March, the largest being Via’s $400 million deal.
Overview
1,003 925
803
1,043 1,168
1,499
1,148
719
999 1,070
1,493
1,295 1,212
1,602 1,630
1,909
1,557
2,206 2,239 2,362
2,740
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Q32018
Q42018
Q12019
Q22019
Q32019
Q42019
Q12020
Capital Raised $m
9.0 8.7 9.0 8.0 9.7
11.0 9.8 8.9 8.8 9.7
14.0
10.0 10.4 12.4
13.7 11.4 12.0
17.2 15.8
17.1 19.7
Average Amount $m
111 106
89
130121
136
117
81
114 110 107
130116
129119
168
130 128142 138 139
# of Deals
3
Israeli High-Tech Capital Raising (By Quarter) | Q1/2015-Q1/2020$400m
$250m
$100m
$27m
In Q1/2020, Israeli high-tech has attracted the record quarterly amount of $2.74B in 139 deals, 76% up from Q1/2019 capital volume. Excluding the mega-deal by Via ($400m), the total amount summed up to $2.34B in 138 deals. Israeli VC funds investments were down to 7% of total capital raised.
Sou
rce:
IVC
Dat
a an
d In
sigh
ts
16% 23% 17% 23% 16% 25% 20%16%
25% 28% 19% 22% 13% 26% 11% 20% 20% 16% 18% 16% 8%
897
395
685 807 797
1,002 846
450
760 771
1,240
807
997 875
1,314
1,574
1,362
1,714 1,601
1,762
2,425
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Q32018
Q42018
Q12019
Q22019
Q32019
Q42019
Q12020
Israeli VCs Share % ($m) VC-Backed Capital Raised $m
66 59 60
8171
90
68
4661
75 71 67 72 72 72
99
78 75 81 82 84
# of Deals
4
Israeli High-Tech Capital Raising in VC-Backed Deals (By Quarter) | Q1/2015-Q1/2020
23 23
2628
26
24
3532
17
January February March
Number of VC-Backed Deals by Month, 2018-2020
2018
2019
2020
Israeli VC-backed deals topped all years, reaching $2.43B – 89% of total capital raised in Q1/2020. However, COVID-19 crisis affected Israeli deal-making in March - only 17 VC-backed deals were closed – 50% down from previous dynamic months of 2020.
Sou
rce:
IVC
Dat
a an
d In
sigh
ts
5
Number of Deals by Round Type | January-March, 2018-2020
1410
20
13 1417
6 69
6
13
20
712
210 10
13
129
15
9
12
1711
62
14
21 9
68
5
8
9
10
2018 2019 2020 2018 2019 2020 2018 2019 2020 2018 2019 2020
Seed A Round B Round C Round & Later
January February March
Seed capital raising was cut down to the mere 2 deals in months of February and March of 2020, following the global COVID-19 crisis.
Sou
rce:
IVC
Dat
a an
d In
sigh
ts
36 37 28 34 24 67 34 22 56 44 23 62 48 32 27 62 42 43 33 51 18
109 227 174 218 253 303 363 151 125 207 249 213 349 235 372 428 432 376 336 382 294
319 319 287 205 207 222 247 154 224 336 432 269 252 521 209 621 399 392 321 511 511
176 124 218 219 248 234 182 135 330 120 112 347 181 400 434 267 479 375 700 588 379
363 218 96 368 437 674 322 256 265 364 677 404 381 414 588 532 206 1,020 849 826 1,537
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Q32018
Q42018
Q12019
Q22019
Q32019
Q42019
Q12020
Seed Round $m A Round $m B Round $m C Round $m Later Rounds $m
6
Israeli High-Tech Capital Raising by Round | Q1/2015-Q1/2020
L
C
B
A
S
In Q1/2020, later rounds (C rounds and later) capital raising peaked reaching the record of $1.92B.
The 37% share of the total capital volume was raised in March, mostly due to the mega-deals of Via ($400m) and
Insightec ($150m).
Sou
rce:
IVC
Dat
a an
d In
sigh
ts
7
Israeli High-Tech Capital Raising by Round | Q1/2015-Q1/2020
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Q32018
Q42018
Q12019
Q22019
Q32019
Q42019
Q12020
Number of Later Rounds 19 16 7 22 18 23 14 13 20 21 19 16 16 17 25 21 17 24 20 22 30
Number of C Rounds 11 9 10 16 14 8 14 7 13 5 7 9 7 8 14 8 17 11 16 14 17
Number of B Rounds 24 21 17 21 15 16 16 11 15 26 21 22 24 36 17 30 23 25 20 25 29
Number of A Rounds 23 25 24 36 40 46 48 31 28 32 36 44 37 37 44 62 45 40 59 43 39
Number of Seed Rounds 34 35 31 35 34 43 25 19 38 26 24 39 32 31 19 47 28 28 27 34 24
Number of Seed Rounds Number of A Rounds Number of B Rounds Number of C Rounds Number of Later Rounds
In total, the number of early rounds (Seed + A Rounds) downsized to 63 in Q1/2020 – 17% under the quarterly averages of 2019.
Sou
rce:
IVC
Dat
a an
d In
sigh
ts
634 745 515
742 788 1,088
847 509
780 745 1,122 1,054 901
1,318 1,339 1,350 1,259
1,916 1,975 1,930 2,245
44 47 32 59 47 52 60 35 50 61 54 65 55 72 70 80 74 70 78 75 84
8
Quarterly Capital Raising by Stages | 2015 – 2020
33 38 23 32 33
60
33 22
59 44
18
64 48
38 40 56 53
43 49 62
16 32 34
2832 34 41
23 1837
25 1938 32 30 19
45 30 27 28 32 21
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Q32018
Q42018
Q12019
Q22019
Q32019
Q42019
Q12020
Capital Raised $m Number of Deals
See
dG
row
th
Seed companies suffered the major setback due to COVID-19 crisis – raising $16m in 21 deals, down 28% in number and 70% in capital volume from the quarterly averages of 2019. Growth companies kept high pace, mostly due to 9 companies with over $50m each, raising $1.37B in total.
Sou
rce:
IVC
Dat
a an
d In
sigh
ts
Quarterly Capital Raising by Deal Size | 2019–2020
18 18
21
24
19
16
27
21 21
36
14
11
39
12 12
3
9
46
57 7
2
5
8 8
4
810
5
Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sept-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20
<$5M >$30M
Q1/2020 registered 43 deals in the $5m to $20m range, a decrease of 12%, compared with the previous quarter and last year’s corresponding quarter, with 49 deals each. Deals under $5m increased in January, however the following months showed a slowdown, due to COVID-19 crisis.
Sou
rce:
IVC
Dat
a an
d In
sigh
ts
10
Deals Over $50m | Q1-2020
$210m
$150m
$150m
$100m
$61m
$60m
$55m
$50m
$400m
$58m
Leading investors in Deals over $50m
Leading Capital Raising Deals
$200m
11
Methodology
This report reviews capital raised by Israeli high-tech companies from Israeli and foreign venture capital fundsas well as other investors, such as investment companies, corporate investors, incubators and angels.
Reported data present the investments activity IVC collects from reliable media sources, and direct reportsgathered by IVC’s information specialists’ team.
The report is based on data from 436 investors of which 130 were Israeli VC funds and 306 were other entities.The report data was last updated on March 31, 2020.
The term Early Stage companies refers to high-tech companies in the process of development and not yetoffering products to the market.
The report covered total investments in the Israeli venture capital sector, including both VC-backed roundswhere at least one investor participating in the round was a VC fund, as well as deals not backed by venturecapital funds.
The report includes amounts received by each company directly, including direct transactions performedbetween company shareholders.
Most companies belong to more than one technology vertical, therefore the data regarding verticals should beviewed separately per vertical.
12
IVC Research Center is the leading online provider of data andanalyses on Israel’s high-tech, venture capital and private equityindustries. Its information is used by all key decision-makers,strategic and financial investors, government agencies and academicand research institutions in Israel.
IVC-Online Database (www.ivc-online.com) showcases over 9,000Israeli technology startups, and includes information on privatecompanies, investors, venture capital and private equity funds, angelgroups, incubators, accelerators, corporate VCs, investment firms,professional service providers, investments, financings, exits,acquisitions, founders, key executives and R&D centers.
Publications include Newsletters; Daily Alerts; IVC Magazine; Surveys;Research papers and Reports; and Interactive dashboards.
IVC Industry Analytics – analysis, research and insights into thestatus, main trends and opportunities related to exits, investments,investors, sectors and stages.
ZAG-S&W (Zysman, Aharoni, Gayer & Co.) is a leading internationallaw firm specializing in all areas of commercial and business law andis one of Israel’s leading commercial law firms.The firm has earned its international standing due to its globalpresence in the US, China and England. The firm’s attorneysspecialize in all disciplines of commercial law for both publicly heldand private companies, with expertise in hi-tech, life science,international transactions, and capital markets.
ZAG-S&W provides result-driven legal and business advice to itsclients, addressing all aspects of the clients’ business activities,including penetration into new markets in strategic locations. Inrecent years, the firm has acted on most of the equity and debtfinancing transactions by Israeli technology companies on theNASDAQ.It has been the firm’s experience that the best results, those thatgive our clients the competitive advantage they need, are attainedby coupling professional experience, global presence, andconnections with the investor communities in Israel and abroad.
Website Website
13
The information contained in this report is derived fromIVC-Online - the IVC Research Center Ltd. ("IVC") Databaseand the IVC-ZAG Israeli High-Tech Survey.
This report is copyrighted, no part of the material in thisreport (including, but not limited to text, content, andimages) may be reproduced, republished or utilized in anyform or by any means without the explicit and prior writtenconsent of IVC.
C O P Y R I G H T S
2020
14
Marianna ShapiraResearch Director, IVC Research Center
[email protected]+972-(0)73-212-2339
C O N T A C T U S