Kesselman and Kesselman - PricewaterhouseCoopers Israel today published its 2006 Money Tree report. According to the report, $1.2 billion was invested in 2006 in Israeli high-tech companies which have at least one venture capital fund investor. This is a rise of 9% from 2005. Investment in the fourth quarter totaled $330 million, up 30% compared with the corresponding quarter of 2005.
2006 was also the best year since 2001 for follow-on high-tech investments by venture capital funds. 209 companies raised $793 million in follow-on investments, amounting to 66% of total investments for the year.
According to Kesselman and Kesselman - PricewaterhouseCoopers Israel partner and high-tech practice leader Joseph Fellus this past year was one of the top years for exits whether through mergers and acquisitions, or through IPOs. The amounts of these transactions demonstrate the interest in Israeli innovation by many global technology giants.
52 of the high-tech companies included in the report are registered as Israeli. The Israeli companies raised $168 million, 51% of all investment. Most of the foreign companies are registered in the US.
The network and communications subsector climbed to the top spot in the fourth quarter 2006 after poor performance in the previous quarter. The rise in investment can be attributed to the relatively advanced stage reached by companies in the sector, requiring increased financial resources.
Semiconductors were at the bottom of the sector with only three companies raising an aggregate $19 million in the fourth quarter. Despite weakness in the subsector, total investment in the sector out of total investments in general in 2006 rose to 14% from 12% in 2005.
Published by Globes [online], Israel business news - www.globes.co.il - on January 16, 2007
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