As of Dec. 26, Israeli tech funding in 2023 totaled $6.9 billion across 392 deals. This reflects a 44% decrease in the number of deals and a 56% decrease in funds raised compared to 2022, with investment and activity volumes returning to the levels of 2018 and 2019. I did.
These insights come from a preliminary report by IVC Research Center and LeumiTech on fundraising activity in the Israeli technology ecosystem in 2023. The complete Israel Technology Review will be published in January.
In the fourth quarter of 2023, marked by the war with Hamas in Gaza, Israeli companies raised $1.45 billion in 75 deals, with seed rounds amounting to $220 million in 31 rounds.
The 2023 fourth quarter numbers are similar to the 2018-2019 fundraising range. While a stable trend was observed in Q2 and Q3 2023, fundraising activity in Q4 2023 decreased by 15% and the number of transactions decreased by 16% compared to Q3 2023. % decreased.
“Q3 data continues to show first signs of stabilization in the amount and scope of capital raisings, reaching 2018-19 levels,” said Maya Eisen Zafrir, CEO of LeumiTech. he said, adding that this is in line with the plan. Global trends in the technology market.
“Although initial investment is still decreasing, [early rounds], which is mild compared to previous quarters. Furthermore, we recognize that the steady rate of additional investment indicates that companies are beginning to adjust their value to the new interest rate environment. ”
Tzafrir said that although “difficult events of the past few months and the fight against a difficult global macro environment have created challenges for Israeli high-tech companies in the global environment,” a relatively modest decline of 15% and investment He said there was a clear increase in The seed-stage figures “demonstrate the durability of Israel’s high-tech industry and are an important reminder of the role this sector plays in the Israeli economy, especially in recent times.”
IVC CEO Ben Klein said: “2023 was a difficult year for the Israeli economy in general and the local high-tech industry in particular. The results for the year as a whole and in the fourth quarter in particular confirm our optimistic approach to the local industry. Despite the complexities, the level of foreign investor participation clearly demonstrates the attractiveness of Israeli high-tech companies even in difficult times.”
The report reveals that the war in Gaza has not deterred foreign investors. Participation in financing Israeli high-tech companies increased relatively, following the year-to-date trend, compared to a sharp decline in the scope of local investors’ participation in transactions in the fourth quarter of 2023. The presence of foreign investors is an important indicator of the availability of investment funds, the authors say.
IVC Research Center is Israel’s most comprehensive online high-tech and venture capital database, providing information and analysis since 1997.