The IVC and Leumi-Tech high-tech report for the first half of 2022 indicates fundraising of $ 9.8 billion in 395 rounds of high-tech companies in Israel. In the second quarter of the year, $ 4.12 billion was raised in 182 transactions, while in the first quarter about $ $ 5.68 billion in 213 rounds. That is, there is a dramatic decrease from the first quarter to the second and there is also a decrease compared to last year.
According to a BizPortal survey, the number of people laid off in high-tech has already reached 4,000, and this is growing. This is not a big crisis (at least for now), but it is a dramatic change in the state of the industry and this is also reflected in the wages of new workers (expansion here).
Among the main findings of the report can be seen that the early rounds of pre-Seed (Seed, A) were on the rise during H1 / 2022 and the median investment in such transactions climbed to $ 5.6 million. 66 exits were made in the first half of 2022, with 9 IPOs, including two SPACs, and the number of exits included 56 acquisitions.
About 700 companies were established in 2021, and according to ICV estimates, about 458 more companies were established in the first half of 2022. Looking at the trend, the volume of investments in the first half decreased by 30% compared to the second half of 2021, after a continuous increase since 2016.
The report also shows that the receipts from mega-transactions – each over $ 100 million – in the second quarter of 2022, were cut by about 70% compared to the peak numbers in the fourth quarter of 2021, and were responsible for most of the decline in investment between the second half of 2021 and the half. The first of 2022.
According to Guy Holtzman, CEO of IVC: “The first six months of 2022 have found Israeli high-tech at a turning point between excessive valuations and a high chance of a global economic downturn. However, the Israeli high-tech economy has successfully completed the last quarter. The numbers and amounts of transactions have not changed much at historical levels. “The intense decline in the valuations of high-growth companies has been well in line with the trend on Wall Street. In the coming months, we will see how the situation in the financial markets will affect companies at earlier stages.”
Timor Arbel-Sederes, CEO of Omitech: “In recent months, we have witnessed processes that will eventually lead to the healthy economic conduct of the high-tech industry in terms of capital multipliers and the focus of companies on growth, along with operational efficiency and the formation of an established business model. Mature companies “.
Arbel-Seder added that “according to the report, 90% of the fall in fundraising levels is due to fundraising higher than $ 50 million. Fundraising below $ 50 million remains relatively stable, this figure proves that there are good companies that manage to continue raising at real values. “Reality requires them to make rapid changes, including in terms of efficiency, in order to preserve the cash register they have for a longer period of time.” She notes that “the demand for technological products continues to be stable in all areas. The data show that investors continue to invest in young companies at similar levels. For entrepreneurs who are in the initial stage there is no doubt that this is an opportunity. A real business model. “
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