Download - MoneyTree Q1 - PwC · Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Total quarterly investment (in million $): 427 194 170 342 165 196 232 311 Number of investments

PwC Israel I www.pwc.co.il Q1 2015 MoneyTreeTM Report

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VC investment up 34% compared to the parallel quarter last year Some $311 million invested in VC-backed hi-tech companies in the first quarter of 2015 Up from $232 million in the corresponding quarter

Tel Aviv, Israel -- June 30, 2015 -- Venture capital-backed hi-tech companies (in which at least one investor in a funding round is a venture capital fund) raised $311 million in Israel during the first quarter of 2015, up from $232 million in the corresponding quarter last year and a 28% decrease from $433 million in the previous quarter, according the latest PwC Israel MoneyTree™ Report.

The report also indicates that 31 Israeli high-tech companies raised VC funding in the first quarter of 2015, compared to 40 in the preceding quarter and 38 in the corresponding quarter of last year. The average investment per company in the quarter under review was $10 million, down from $10.8 million in the preceding quarter and up from $6.1 million in the corresponding quarter of last year.

During the current quarter, $260 million, 84% of the total quarterly investment, was invested in 13 deals of over $10M, compared with $330 million (76%) invested in 10 deals in the previous quarter and $121 million (52%) in 7 deals in the first quarter of 2014.

Rubi Suliman, Partner, co-leader of PwC Israel's high-tech practice, One of the most noticeable data in this report is the fact that 84% of the money invested goes to rounds of $10m or more. This directly continues Q4 2014 in which 76% was invested in over-$10M rounds. That result is a bulge in average investment per company in those two quarters.

Those data are very characteristic of markets with very high liquidity levels, which allow growing companies to have much more significant capital rounds than previously and the preference of large funds to make more significant investment rounds in those companies in attempt to create unicorns. While it is clear that different times dictate different investment strategies, it seems that this strategy is in fact a return to the way in which venture capital funds.

Rubi Suliman, PwC Israel's high-tech practice leader

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www.pwc.com/il

The PwC Israel MoneyTree™ Report for the first quarter of 2015

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PwC Israel I www.pwc.com/il Q1 2015 MoneyTreeTM Report

Total annual investment 2008 - 2015 (in millions $)

Average investment per company (in millions $)

427

291

393

287

194162

178201

170

206

253 256

342364

198

324

165

255

171

277

196174

225

300

232 233266

433

311

9269 78 81

49 61 5577 72 60 68 74 83 76

4458 48 59 52 52 51 43 42 44 38 37 44 40 31

Q1-08

Q2-08

Q3-08

Q4-08

Q1-09

Q2-09

Q3-09

Q4-09

Q1-10

Q2-10

Q3-10

Q4-10

Q1-11

Q2-11

Q3-11

Q4-11

Q1-12

Q2-12

Q3-12

Q4-12

Q1-13

Q2-13

Q3-13

Q4-13

Q1-14

Q2-14

Q3-14

Q4-14

Q1-15

4.6 4.25.0

3.54.0

2.73.2

2.6 2.43.4 3.7 3.5

4.14.8 4.5

5.6

3.44.3

3.3

5.3

3.8 4.0

5.4

6.86.1 6.3 6.0

10.810.0

Q1

-08

Q2

-08

Q3

-08

Q4

-08

Q1

-09

Q2

-09

Q3

-09

Q4

-09

Q1

-10

Q2

-10

Q3

-10

Q4

-10

Q1

-11

Q2

-11

Q3

-11

Q4

-11

Q1

-12

Q2

-12

Q3

-12

Q4

-12

Q1

-13

Q2

-13

Q3

-13

Q4

-13

Q1

-14

Q2

-14

Q3

-14

Q4

-14

Q1

-15

427

291

393

287

194162

178201

170

206

253 256

342364

198

324

165

255

171

277

196174

225

300

232 233266

433

311

9269 78 81

49 61 5577 72 60 68 74 83 76

4458 48 59 52 52 51 43 42 44 38 37 44 40 31

Q108

Q208

Q308

Q408

Q109

Q209

Q309

Q409

Q110

Q210

Q310

Q410

Q111

Q211

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Q213

Q313

Q413

Q114

Q214

Q314

Q414

Q115

Total quarterly investment(in million $):

Number of investments

4.64.2

5.0

3.54.0

2.73.2

2.6 2.4

3.4 3.7 3.54.1

4.8 4.5

5.6

3.44.3

3.3

5.3

3.8 4.0

5.4

6.86.1 6.3 6.0

10.810.0

Q1

08

Q2

08

Q3

08

Q4

08

Q1

09

Q2

09

Q3

09

Q4

09

Q1

10

Q2

10

Q3

10

Q4

10

Q1

11

Q2

11

Q3

11

Q4

11

Q1

12

Q2

12

Q3

12

Q4

12

Q1

13

Q2

13

Q3

13

Q4

13

Q1

14

Q2

14

Q3

14

Q4

14

Q1

15

Average investment per company (in million $):

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% of funds making no investment

Analysis by Geographic Location of Company Registration

In addition to investment in high-tech companies with operations in Israel, local venture capital funds also invested approximately $80 million in 2 overseas high-tech companies that are not engaged in operations in Israel.

Companies Receiving Grants from the Office of the Israel Chief Scientist

3 companies, representing 7% of all companies raising VC capital in the first quarter of 2015, are supported by the Office of the Israel Chief Scientist. Some $25 million (8%) of total investment funds went to these companies.

Investments made during corresponding quarter (in millions $)

24%

35%

26%30% 30% 29%

34% 32%36%

42%46% 46%

43%39%

34%

41%

52%

32%

46% 45%

51%

42%38%

32%36%

31%34%

45%41%

Q1-08

Q2-08

Q3-08

Q4-08

Q1-09

Q2-09

Q3-09

Q4-09

Q1-10

Q2-10

Q3-10

Q4-10

Q1-11

Q2-11

Q3-11

Q4-11

Q1-12

Q2-12

Q3-12

Q4-12

Q1-13

Q2-13

Q3-13

Q4-13

Q1-14

Q2-14

Q3-14

Q4-14

Q1-15

Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015


427 194 170 342 165 196 232 311

Number of investments 92 49 72 83 48 51 38 31

-

50

100

150

200

250

300

350

400

450

24%

35%

26%30% 30% 29%

34%32%

36%

42%46% 46%

43%39%

34%

41%

52%

32%

46% 45%

51%

42%38%

32%36%

31%34%

45%41%

Q108

Q208

Q308

Q408

Q109

Q209

Q309

Q409

Q110

Q210

Q310

Q410

Q111

Q211

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Q213

Q313

Q413

Q114

Q214

Q314

Q414

Q115

% of funds making no investment

Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015


427 194 170 342 165 196 232 311

Number of investments 92 49 72 83 48 51 38 31

-

50

100

150

200

250

300

350

400

450



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Companies Receiving Grants from the office of the Israel Chief Scientist 2011-2015 (in millions $)

Investments made during corresponding quarters:

6131

44

138

2138

19

11079

5197

150

5228

46 49

21

281 333

154 186 144217

152 167117 123 128 150 180 210 220

384290

18%

9%

22%43%

13% 15%11%

40% 40%29%

43% 50%

22%12%

17%11%

7%

Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15

Initial

Follow-up

% initial $ of total investment

146

75

53

3526 24

66 65

21

5043

26

45

55

70

322536

2113 13 11

15 1610

14 11 134 5

11 8 83

Q111

Q211

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Q213

Q313

Q413

Q114

Q214

Q314

Q414

Q115



6131

44

138

2138

19

11079

5197

150

5228

46 49

21

281 333

154 186 144217

152 167117 123 128 150 180 210 220

384290

18%

9%

22%43%

13% 15%11%

40% 40%29%

43% 50%

22%12%

17%11%

7%

Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15

Initial

Follow-up

% initial $ of total investment

146

75

53

3526 24

66 65

21

5043

26

45

55

70

322536

2113 13 11

15 1610

14 11 134 5

11 8 83

Q111

Q211

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Q213

Q313

Q413

Q114

Q214

Q314

Q414

Q115



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Software sector

Number of Companies and Total Quarterly investments 2011- 2014 (in millions $)

Communications and Networking sector


Total annual Investment by sector 2011 - 2015(% of total $ invested)

Analysis by Leading Technological Sector

0%

34%

43%

0%

22%

0% 0%

15%17%

33%

22%

10%

2%0%

19%

41%

16% 14%

6% 4%

0%

12%

30%

23%

16%13%

3% 3%

8%

27%31%

6%

11% 13%

4%

31%

18%21%

9% 9%

3%

9%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Communications andNetworking

Software Internet Semiconductors Life Sciences Cleantech Miscellaneous

Q1 2015 Q4 2014 Q1 2014 2014 2013 2012

Q115

Q414

Q314

Q214

Q114

Q413

Q313

Q213

Q113

Q412

Q312

Q212

Q112

Q411

Q311

Q211

Q111

Total Investments 166624451411251812371166267663588

Number of Companies 143395336161161212111215

0

20

40

60

80

100

120

140

Q115

Q414

Q314

Q214

Q114

Q413

Q313

Q213

Q113

Q412

Q312

Q212

Q112

Q411

Q311

Q211

Q111



0

20

40

60

80

100

120

140

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Internet Sector


Semiconductors Sector


Life Sciences Sector


Miscellaneous Sector



Q115

Q414

Q314

Q214

Q114

Q413

Q313

Q213

Q113

Q412

Q312

Q212

Q112

Q411

Q311

Q211

Q111



0

20

40

60

80

100

120

140

160

Q115

Q414

Q314

Q214

Q114

Q413

Q313

Q213

Q113

Q412

Q312

Q212

Q112

Q411

Q311

Q211

Q111



0

10

20

30

40

50

60

70

80

90

100

Q115

Q414

Q314

Q214

Q114

Q413

Q313

Q213

Q113

Q412

Q312

Q212

Q112

Q411

Q311

Q211

Q111



0

10

20

30

40

50

60

70

80

Q115

Q414

Q314

Q214

Q114

Q413

Q313

Q213

Q113

Q412

Q312

Q212

Q112

Q411

Q311

Q211

Q111

Total Investments 11290-19139175421819154723

Number of Companies 1120-112422104134126

0

5

10

15

20

25

30

35

40

45

50

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Cleantech sector


Total Investment by sector


Q115

Q414

Q314

Q214

Q114

Q413

Q313

Q213

Q113

Q412

Q312

Q212

Q112

Q411

Q311

Q211

Q111

Total Investments 085141025626221682-22101126

Number of Companies 021324326443-2358

0

10

20

30

40

50

60

70

Communications and Networking ,

0%

Software, 34%

Internet, 43%

Semiconductors, 0%

Life Sciences, 22%

Cleantech, 0%

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Early round

Analysis by Investment Round

Number of Companies and total quarterly investments 2011- 2015 (in millions $)

Total annual Investment by Investment Round 2011 - 2015 (% of total $ invested)

Third round


32%

39%

25%

4%

26%24%

47%

3%

51%

3%

33%

12%

29%

15%

49%

6%

49%

21%19%

11%

31%

20%

34%

15%

0%

10%

20%

30%

40%

50%

60%

Early Round Third Round Later Round Bridge Loan

Q1 2015 Q4 2014 Q1 2014 2014 2013 2012

Q115

Q414

Q314

Q214

Q114

Q413

Q313

Q213

Q113

Q412

Q312

Q212

Q112

Q411

Q311

Q211

Q111



-

50

100

150

200

250

Q115

Q414

Q314

Q214

Q114

Q413

Q313

Q213

Q113

Q412

Q312

Q212

Q112

Q411

Q311

Q211

Q111



-

20

40

60

80

100

120

140

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Bridge Loan

Number of Companies and total quarterly investments 2011- 2015(in millions $)

Total Investment by Investment Round

Later Round


Q115

Q414

Q314

Q214

Q114

Q413

Q313

Q213

Q113

Q412

Q312

Q212

Q112

Q411

Q311

Q211

Q111



-

50

100

150

200

250

Q115

Q414

Q314

Q214

Q114

Q413

Q313

Q213

Q113

Q412

Q312

Q212

Q112

Q411

Q311

Q211

Q111



-

10

20

30

40

50

60

Early Round, 32%

Third Round, 39%

Later Round, 25%

Bridge Loan, 4%

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Analysis by Company Development Stage

Seed Stage

Number of Companies and total quarterly investments 2011- 2015(in millions $)

Intermediate stage


Total annual Investment by Development Stage 2011 - 2015 (% of total $ invested)

4%

68%

27%

1%

7%

26%30%

37%

9%

51%

34%

5%8%

29%

34%30%

6%

44% 44%

6%8%

45%

31%

16%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Seed/Startup Stage Early stage Expansion stage Later Stage

Q1 2015 Q4 2014 Q1 2014 2014 2013 2012

Q115

Q414

Q314

Q214

Q114

Q413

Q313

Q213

Q113

Q412

Q312

Q212

Q112

Q411

Q311

Q211

Q111



-

5

10

15

20

25

30

35

Q115

Q414

Q314

Q214

Q114

Q413

Q313

Q213

Q113

Q412

Q312

Q212

Q112

Q411

Q311

Q211

Q111



-

50

100

150

200

250

300

350

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Analysis by Company Development Stage

Later Stage


Total Investment by company development stageSplit of the Intermediate stage between early and expansion stage

Q115

Q414

Q314

Q214

Q114

Q413

Q313

Q213

Q113

Q412

Q312

Q212

Q112

Q411

Q311

Q211

Q111



-

20

40

60

80

100

120

140

160

180

200

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q115Q414Q314Q214Q114Q413Q313Q213Q113Q412Q312Q212Q112Q411Q311Q211Q111

Expansion stage

Early stage

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q115Q414Q314Q214Q114Q413Q313Q213Q113Q412Q312Q212Q112Q411Q311Q211Q111

Expansion stage

Early stage

Seed/Startup Stage, 4%

Early stage, 68%

Expansion stage, 27%

Later Stage, 1%

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The MoneyTree™ Report is published quarterly by Kesselman & Kesselman PwC Israel, in conjunction with the reports published in the United States and Europe by the global accounting, tax and consulting firm, PricewaterhouseCoopers. This quarter, 33 venture capital firms participated in the production of the Report. The findings of the Report are widely used each quarter by Israeli and foreign venture capital funds, commercial banks, investment banks and other financial institutions both in Israel and abroad, high-tech companies, government departments, the Office of the Chief Scientist and others.The MoneyTree™ Report measures investments by the professional venture capital community in private emerging hi-tech companies in Israel. The information presented in the MoneyTree report includes investment rounds in Israeli hi-tech com-panies or Israeli related (companies that are incorporated outside of Israel, but were founded by Israeli founders with R&D subsidiary in Israel), with at least one VC participating in the financing round. The VC's that are included are all Israeli VC's or foreign VC's that have at least one partner in Israel. The information is mostly reported to us by the VC's and other reli-able sources and is verified prior to its inclusion in the report.

For further information

Rubi SulimanPartner, Hi-tech leader, PwC IsraelOffice: +972-37954780Email: [email protected]

© 2015 Kesselman & Kesselman. All rights reserved.In this document, “PwC Israel” refers to Kesselman & Kesselman, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.

PwC Israel helps organisations and individuals create the value they’re looking for. We’re a member of the PwC network of firms in 157 countries with more than 195,000 people who are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com/il.

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Kesselman & Kesselman, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

Tamar Yaron-MoldovanManager, Hi Tech Business Development,PwC IsraelOffice: 03-7954572 Email: [email protected]

Rotem Geslevich Head of Hi Tech Business Development ,PwC IsraelOffice: 03-7955092 Email: [email protected]