Israeli high-tech companies raised $338m from VCs in the second quarter of 2004 according to research published by the Israeli Venture Capital Research Center (IVC). Ninety-one companies benefited from venture investment, which came from both domestic and international sources. In the second quarter, Israeli VCs invested $156m in Israeli companies compared with $158m in the previous quarter and $94m in Q2 2003. The Israeli VC share of the total amount invested in Israeli high-tech companies was 46%, slightly below the 49% share of the previous quarter.
The €338m raised in Q2 2004 is a 5% increase on the $323m raised by 111 companies in the previous quarter and 25% higher than the $271m raised by 86 companies in the second quarter of 2003.
The average company financing round increased by 27% from the previous quarter and 17% from the second quarter of 2003 to $3.7m. Sixty-four companies attracted more than $1m. Of these, eight companies raised between $5m and $10m each and eight companies raised more than $10m each.
Communications was the dominant sector of Q2 with 32 companies receiving €123m, 36% of the total raised, compared with 33% in Q1 and 29% in Q2 2003.
The first six months of 2004 has seen a 37% rise in the amount of capital raised compared to the same time last year.
Efrat Zakai, Director of Research at IVC, said: “We are forecasting that full year capital raising by Israeli firms will reach $1.2bn in 2004. That’s almost a 20% increase from 2003 levels.”