Israeli high tech companies raised $1.011bn in 2003, down 11% from the $1.138bn raised in 2002, according to a survey conducted by the Israel Venture Capital Research Center and Israel Venture Association. Of this total 58% was from foreign investors.
The survey reviews capital raised by private Israeli high tech companies.
It is based on figures from 125 venture investors of which 66 are Israeli management companies and 59 foreign entities.
Israeli VC investments in foreign companies on the other hand soared 63% in 2003 as $101m was invested, compared to $64m in 2002. In Israel seed companies increased their share of capital raised in 2003 with 37 companies attracting $58m, 6% of the total. Mid stage companies attracted the lion’s share of funds with 177 raising $496m accounting for 47% of total capital raised compared with $614m or 53% in 2002 and $940m or 30% in 1999.
By sector, a comparison with 1999 figures shows a steep decline in Internet investment with 14 Internet companies raising $41m in 2003 compared to $330m invested in 102 companies in 1999. Both the life science and software sectors upped their respective shares of capital raised to 19% and 18% from 13% and 14% in 1999.
IVC chairman Zeev Holtzman said: “Today, some ten VCs are in a race to raise new funds and we forecast that they will succeed in raising $1bn in 2004. We foresee an increase in the pace of technology investments in light of the more buoyant capital markets in Israel and abroad. This indicates that capital raising by Israeli companies will top $1bn in 2003 and we are projecting another $1bn-plus year for 2004.”