Israeli Startups Raise Nearly $1B In Third Quarter Of 2016

By Yonatan Sredni and Einat Paz-Frankel, NoCamels October 27, 2016 2 minutes

Money via Flcikr

Israeli high-tech and startup companies raised $982 million in the third quarter of 2016, in line with the $1 billion quarterly average raised in the past three years, according to a report by Israeli research firm IVC Research Center and accounting firm KPMG Somekh Chaikin. In the first nine months of the year, Israeli startups raised $3.8 billion, a 21 percent jump over the first nine months of 2015.

The average funding round reached $7 million in the first nine months 2016, a 9 percent increase over the $6.4 million average in the first nine months of 2015, which means Israeli startups are attracting larger investments.

Tel Aviv at Night via PikiWiki

“The flow of quality deals continues to be strong”

Among the notable funding rounds in the third quarter of 2016 is the $45 million investment led by Australian entrepreneur Leon Kamenev in EdTech startup SlateScience, which developed the Matific educational math and science games for mobile and web platforms. Founded in 2012, the company’s products are sold in 20 countries around the world.

Another large round was that of Kaltura, an Israeli open-source video platform that in August raised a whopping $50 million from American investment bank Goldman Sachs, reportedly bringing its total capital to $165 million, and its valuation to $500 million.

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The IVC-KPMG survey findings presented 141 funding deals that closed in the third quarter of 2016, a 26 percent drop from the 193 deals in the preceding quarter and 17 percent below the three-year quarterly average of 171 rounds per quarter.

“While we observe a decline in the number of investments, we don’t believe that the local ecosystem is going to be dramatically impacted by the global downtrend in the long run, since the flow of quality deals continues to be strong, and new growth investors are investing in these deals, providing a wider horizon to such companies, both in terms of the type of potential exit and valuation,” KPMG Somekh Chaikin’s partner Ofer Sela said in a statement.

Sela added: “We expect the IPO market in the US to be much stronger at the beginning of 2017, which will keep pushing both investors and VC-backed companies to continue nourishing the local ecosystem, alongside more traditional industries that are looking to reinvent themselves through innovative solutions.”

IVC Research Center CEO Koby Simana said in a statement: “We expect 2016 to close as a record year in terms of capital raising.”