Investment in Israeli high-tech down 65% in Q2 to $1.78 billion
Investment in Israeli high-tech down 65% in Q2 to $1.78 billion
Despite the number of transactions also falling 48% year-over-year, Q2 saw a 2% increase in investment compared to the first quarter of the year
Israeli high-tech companies experienced a significant decline in funding during the second quarter of 2023, with investments totaling $1.78 billion in 100 deals, reflecting a 65% decrease compared to the same period last year. The report, jointly conducted by LeumiTech and IVC Research Center, reveals a worrisome trend of dwindling investment and a 48% drop in the number of transactions.
However, there is a glimmer of hope as Q2 demonstrates a slight slowdown in the downward trajectory when compared to Q1 of 2023, with a modest 2% increase in investment during the second quarter. This follows a stark contrast to the previous year when Israeli high-tech received $5.8 billion in the corresponding quarter.
Timor Arbel-Sadras, CEO of LeumiTech, said, "We continue to see a decrease in investment, both in the amount invested as well as in the number of companies raising funds. At the same time, we are seeing the first signs of stabilization in the pace of recruitment due to secondary investments, in contrast to the halt in initial investments."
Another point of interest that emerged from the report is that the amount of foreign investment was not as low as in the past six consecutive quarters, which saw a steady and significant decrease in foreign investment in Israel.
Calcalist published earlier today that there was a 90% drop in initial investments by Israeli VCs during the first quarter of 2023, according to a report by law firm Gornitzky GNY and the IVC Research Center. It appears that the ten most active funds in Israel made only three initial investments in startup companies in the first quarter, compared to 30 initial investments made by the same companies in the corresponding quarter in 2022.
