The report revealed that 2021 was a successful year with 238 exit transactions totaling $ 22.2 billion, 13 Israeli high-tech companies preferred to choose Spock issues, 48 others were issued in Tel Aviv
The Israeli high-tech industry sums up 2021 and continues to rise: Capital raising in Israeli high-tech in the past year reached a new high with $ 25.6 billion raised in 773 transactions. This is an increase of 146% from the amount raised last year as well as a 28% increase in the number of transactions in the industry. The last quarter of 2021 showed strong results of capital raising activity and reached a peak of $ 8 billion in 206 transactions, while in Q3, 170 raising transactions totaling $ 5.7 billion were executed.
Guy Holtzman, CEO of IVC, “Undoubtedly, the year 2021 set records in the volume of capital entering the Israeli high-tech market. However, there are aspects that need to be considered regarding the Israeli high-tech companies – they will have to prove their value and increase the volume of profit next year. “Israeli tech has reached a glass ceiling with about 9,500 companies active in the field, with multinational R&D centers and high-tech Israeli companies continuing to attract more and more local manpower.”
There was also a significant increase in 2021 in financing early rounds – Pre-Seed and Seed – which attracted a significant amount totaling $ 3.7 billion, 97% more than in 2020, but only 14% of total capital in the past year. In addition, the raises in later rounds, round C and above, constituted the majority of the capital raised in 2021 and attracted 65% of the total capital.
The IVC-String Lawyers report notes that in 2021 mega-transactions led the capital raising to record numbers with 155 transactions of over $ 50 million each totaling $ 18.93 billion, representing 74% of the total capital raised this year. This is a sharp increase compared to 2020 2019 with 39 and 47 such transactions, respectively.Also, this year 77 mega transactions of over $ 100 million each were recorded, compared to 18 and 20 such transactions in 2019 and 2020, respectively.These huge transactions amounted to 14 $ 1 billion – 55% of the total capital raised in 2021. The fourth quarter was particularly rich in mega-rounds, with 26 leading deals raising 37% of the total capital raised this year in these deals.
Mariana Shapira, senior analyst at IVC, details: “In 2021, a record number of Israeli high-tech companies were discovered that managed to raise capital from more than one round during a year: 65 high-tech companies compared to 40 companies and 25 companies in 2020 and These companies attracted the most respectable capital sums this year; 10 prominent companies raised a total of $ 4.5 billion in more than one round each (each round over $ 120 million). And causes to consider the effect of the investors’ preference of stable, expanding and well-known companies over the others in the Israeli high-tech market.
According to the report, the companies that benefited most from capital investments in the past year operated in the cyber and fintech fields with 23 and 21 transactions that attracted record sums of more than $ 100 million per round, respectively. This is compared to 8 and 5 transactions of similar magnitude during the year 2020. The leading cyber security deals were with Clarotti ($ 400 million) and Fireblocks ($ 310 million). Deel ($ 425 million) and Celsius Network ($ 400 million) bypassed capital raising at Fintech. At Future Meat Technologies ($ 320 million).
The IVC-Meitar report also shows that in 2021 foreign investment soared with a record $ 18.64 billion, accounting for 73% of the total capital raised. The number of investments by foreign and Israeli investors continued to increase in 2021, as well as the gap in investments and amounts between the two groups – investors Israelis and foreigners – continued to grow.
In terms of exits in Israeli high-tech, the report revealed that 2021 was a successful year with 238 transactions executed to the tune of $ 22.2 billion, without exceptional huge transactions (as happened in 2017 and 2019). When almost 50% of the exits revenues of 2021 were received From the initial public offerings.
Revenue from merger transactions ranging from $ 100 million to $ 500 million reached 54% in 2021. The big change in M&A activity was in relatively small transactions – a range of $ 20-100 million – with 44 transactions during 2021, compared to a significantly lower number of transactions in this equal range between 2015 and 2020.
The Israeli stock exchange also arose in 2021, when 48 Israeli high-tech companies chose to make issues of an IPO on the Tel Aviv Stock Exchange, in addition to 23 IPOs on Wall Street and other foreign stock exchanges, which brings the total amounts from initial public offerings to more than $ 10 billion in 2021. In addition, although technology companies have recorded a significant correction in value since March 2021, the overall valuation of companies choosing to go public was impressive. Three notable companies to note this year were Playtika valued at $ 13 billion, IronSource valued at $ 11 billion and SentinelOne valued at $ 9 billion.
2021 was also the year of the SPAC, in which 13 Israeli high-tech companies preferred to opt for SPAC issues in 2021 and raised $ 2.93 billion, with most of these companies seeing a significant contraction in their valuations.