Israel VC fundraising drops in 2009, seen up in ’10

The figure is the third lowest annual amount raised in the past decade, it said.

“Foreign institutional investors — who before the crisis had been the lead source of capital invested in Israeli funds — have suffered serious losses due to the credit crunch,” said IVC Chief Executive Officer Koby Simana.

“These losses have reduced capital available for investments. The decrease in capital raised by Israeli venture capital funds reflects a global trend,” Simana added.

About $1.2 billion in capital is currently available for investment by Israel VC funds, of which $400 million is intended for first investments in high-tech companies, with the remainder reserved for follow-on funding.

IVC projected Israeli VC funds would raise $500 million in 2010 for investment in high-tech firms in the next few years.

Israeli private equity funds that partly invest in technology funds are not included in this survey.

Capital raising peaked at $2.9 billion in 2000. (Reporting by Joseph Nasr; Editing by David Holmes)