AI Takes Center Stage in Israeli High-tech

18 April, 2019

Out of $1.55 Billion raised in Q1 2019, AI companies attracted $599 Million raised in 51 deals—almost doubling the figures of Q1 2018

Israeli High-Tech Companies Raised $1.55 Billion in 128 Deals during Q1 2019. According to a new research made by IVC-ZAG, the first quarter of 2019 continued the uptrend of VC investments:  Israeli high-tech companies raised 28% more in capital amounts and 15% more in the number of deals, compared to Q1 2018. Investment amounts and valuations of Artificial Intelligence deals continue to grow, with large deals such as Augury ($25m) and ($40m).

The ubiquity of AI makes it the relevant technology for big funding rounds in other industry verticals such as Automotive (Innoviz – $132m) and Cyber Security (PerimeterX – $43m). Another finding is the growing importance of Artificial Intelligence technologies: In general, Out of the $1.55 billion raised in Q1 2019, AI companies attracted $599 million raised in 51 deals—almost doubling the figures of Q1 2018. 

Another major finding is that VC funds prefer mature companies over the young and risky ones. C financing rounds soared  $476 million raised in 17 deals, the highest figures since 2014. Deals higher than $20 million were responsible for 64% of the total amount invested in Q1. The lower amount range, smaller than $5m, accounted for less than 7% of the total raised in the quarter.

It means that the investors appetite for early maturity stage companies (Seed + R&D), decreased dramatically since 2016. The investors have tended to allocate more resources to less risky ventures with moderate returns—a trend that has continued in Q1. During 2018, the gap between capital raising amounts in mature and early stage companies was wider than ever and will probably increase this year.

The researchers mentioned that investors involvement in the Israeli start-up ecosystem has grown in the recent years, as reflected in the Average Number of Investors per Deals chart. “In accordance with rising investor interest in more mature companies, the most significant investor type to increase its presence was the Corporate VC type, which participated in 29 deals in Q1 2019.”


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Posted in: Deals and Investments , News

Posted in tags: vc