Israel Funding Ecosystem
Analysis by: Noa Shamay, Investment Analyst at Cardumen Capital Tel Aviv Office.
Foreword by: Gonzalo Martínez de Azagra, Co-founder and General Partner at Cardumen Capital Tel Aviv Office.
Known as the “Start Up Nation” or “Silicon Wadi” Israel has proven itself as one of the leading high-tech ecosystems in the world. In 2019 Israel was ranked 1st in venture capital investments per capita with over $410 raised, followed by the US, with $282. In addition, Israel came in 6th on Bloomberg’s list of the World’s Most Innovative Countries for 2020 ahead of the US (9th place).
To expand our scope and find more insights Cardumen Capital has created an updated Funding Ecosystem Map of the Israeli market using multiple databases. The map design was inspired by iAngels’ 2018 version and the data about previous funds raised was extracted from Startup Nation Central, Pitchbook, IVC and Meitar’s H1/2020 exit reports.
You can get a high-resolution copy of the landscape by clicking here.
Here are the top highlights of our funding landscape and analysis:
- Incubators are becoming less of a trend, with only 9 incubators opening and remaining active over the past four years. By contrast in the last decade, 92 accelerators have been established and remain active. 67 of them have been established in the last four years.
- There are over 320 active funds in Israel. Since 2015, an average of 23 VCs have been established annually.
- Israeli tech companies raised $33.1 billion over the past 5 years. During the first half (H1) of 2020, 312 deals were closed, compared to 258 deals in H1/2019. The average deal amount in H1/2020 was $16.8M compared to $14.5M in H1/2019.
- During the last five and a half years, most of the capital (69.5%) was deployed by foreign investors.
- The share of foreign investors increased by 33% in H1/2020 compared to the same period in 2019. In contrast, the share of Israeli investors decreased by 20% in H1/2020 compared to H1/2019. The number of deals increased in H1/2020 compared to H1/2019 among both types of investors.
- Given the number of active funds in Israel, activity remains strong despite the effects of COVID-19.
- Even though 44% of all funds invest at an early stage, during the last three and a half years more deals closed in growth stages (119).
- Israeli VCs carried out the largest number of investments in early-mid stage companies.
- Most of the Israeli funds that invest in late stages focus on healthcare (20%).
- We identified 102 active angel investors, of these 8 are female.
- Tel Aviv continues to lead the Israeli high-tech innovation industry with 289 out of 328 funds.
About Cardumen Capital
About Gonzalo Martínez de Azagra
Gonzalo has 17 years of experience in technology and venture capital. He is the Co-founder and General Partner of Cardumen Capital working out of the Tel Aviv Office.
About Noa Shamay
Noa has a bachelor’s degree in Economics and Data Analysis from IDC Herzliya. Her military service was in the prestigious 8200 intelligence unit. She is an analyst at Cardumen Capital working out of the Tel Aviv Office.