Israel private capital 2020 — Report
Pitchbook Data released a new report on the state of Private Capital in Israel 2020, covering private equity and venture capital. I’ll focus on VC only here as it’s the core focus of this blog.
In 2010, VC funds in Israel had over $10 billion of assets under management, by 2017, that number had grown to over $36 billion. The growth is underpinned in part by the availability of Israeli banks’ networks, the lack of a central bank to act as a regulator and the fact that the government can provide tax breaks for VC funding.
- Israel based startups raised $4.1 billion of VC funding in 2019
- VC deals with US investor participation accrued a record $3.2 billion in 2019 and are pacing for a high showing in 2020 as well.
- Israel VC deal activity with CVC participation has also progressed in the last four years, with deals accumulating $2.4 billion in 2019 and $1.5 billion in H1 2020.
- Mobility, Cybersecurity and health have seen a number mega rounds and acquisitions in the last two years
- Israel enjoyed a bumper year in 2019, with exits totalling a record $4.1 billion.
VC fundraising in Israel has developed strongly in the last decade as new GPs have been set up, specialist VC funds have emerged within strong VC sectors, and international investors have invested in the Israeli ecosystem via locally raised funds. We are proud to play a small role in this trend with Remagine Ventures.
Potential risks ahead
The analysts believe that longer-term trends such as cross-border expansion for Israeli startups scaling into Europe or the US may slow as economies dip. Similarly, investments, relocations, or expansions into Israel from VC stakeholders may be delayed until greater certainty is known about the fallout from the pandemic.
Overall, the report paints a positive outlook for Venture Capital in Israel despite the global economy headwinds caused by Covid-19:
“Looking ahead, we expect activity in the Israeli VC ecosystem to remain strong despite COVID-19 and the longer-term economic troubles facing numerous sectors”
Download a copy of the report: