Israeli tech firms raised a massive $ 5.4 billion in 172 fundraising deals in the first quarter of the year, the highest in a quarter and double the amount they raised in the same quarter a year ago showing new data from IVC Research Center and Meitar law firms.
The quarterly amount was 89 percent higher than fundraising in the fourth quarter of 2020 ($ 2.84 billion) and was primarily due to 20 transactions, each of which exceeded $ 100 million in the first quarter ( grossed a total of $ 2.96 billion) a year.
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Foreign investors made 594 investments in the first quarter of this year, compared to an average of less than 400 investments per quarter over the 2019-2020 period, the data showed.
Venture capital firms made up 78% of all investment deals in the quarter, their highest rate in a decade. However, non-VCs investors, such as private investors, preferred to flinch in the quarter, suggesting valuations are too high, IVC and Meitar said in a presentation.
Investors still preferred to invest in late-stage companies rather than early-stage companies: in fact, early-stage companies raised just $ 294 million in 56 transactions in the first quarter of this year, compared to 116 Transactions in the growth phase, in which around 5.1 billion US dollars were transacted, was raised.
There were 33 merger and acquisition agreements totaling $ 2.1 billion in the first quarter of the year. This shows that after the slowdown in M&A activities in 2020 due to the pandemic, “normalcy” has returned to the market. In the first quarter of 2020, M&A deals in 32 deals were still generating high revenues of $ 2.96 billion. In the third quarter of 2020, M&A deals reached just $ 1.9 billion in 17 deals and $ 1.13 billion in 31 deals in the fourth quarter of 2020.
There were 21 IPOs in the first quarter of the year, most of them 19 on the Tel Aviv Stock Exchange.
« 2021 got off to a much more positive start for Israel’s high-tech industry. This resulted in record capital injections per quarter as well as a rebound in exit revenues, showing a buoyant quarter for local IPOs, » said Marianna Shapira. Research director at the IVC.
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