Vertex Israel and TLV Partners are the most active venture capital funds in Israel in 2018 with 11 investments each, according to a new annual report by the Israeli IVC Research Center and Israeli law firm APM & Co.
Ranked second with nine investments each are Hong Kong-based CE Ventures, MizmMaa, and Israeli Micro-VC Next Gear. Pitango, Brazilian fund RIO, Tel Aviv University’s micro-VC fund TAU Ventures and Silicon Valley Upwest Labs came in third with eight investments each in 2018.
“Following the trend that has intensified in recent years, it appears that 2019, similarly to 2018, will be characterized by the continued shift of investments from tradable to non-tradable assets. Along with the development of the market, it is evident that investment areas, as well as groups of managers, become more diverse and distinct,” said Adv. Yonatan Altman, chairman at APM & Co.
“The financing funds are also undergoing an accelerated process of development and diversification,” he added. “We believe that 2019, which has already started by storm, will be a good year for the industry, investors, and managers.”
The report shows that, despite the active investment activity in 2018, there is a decrease in overall VC funds’ first investments activity compared to 2017, with Israeli funds investments shrinking by 17 percent and foreign VCs by four percent. Yet foreign VCs, the report indicates, still maintain their leading spot with 60 percent of total first investments.
Marianna Shapira, research manager at IVC Research Center, said: “IVC has seen a number of trends over 2018 which might continue into the beginning of 2019: the Israeli high-tech market emerges as more attractive to foreign investors over the years, especially VC funds. Their numbers might grow, thereby driving first investments in Israeli startups, since quite a few foreign VCs establish Israeli-dedicated funds.”
“While the majority of funds originate in the US and Asia, European VCs lag behind, as Israeli tech companies are mostly US-market oriented,” she added.
The software sector is also underlined as “the clear favorite in capital investments, it is even more evident among VC funds, as first investment shares in this sector grew from 29 percent in 2013 to 54 percent in 2018,” Shapira pointed out.