177 fundraising transactions were executed in Q3 / 2021 and totaled $ 5.89 billion * 20 raising transactions of more than $ 100 million each amounted to 55% of the total capital raised in the third quarter
The Israeli high-tech industry continues to rise: During Q1-Q3 / 2021, Israeli high-tech companies enjoyed a historic record in capital raising, with $ 17.78 billion raised in 575 rounds. The total amount raised during this period reflects an increase of 71% of the total capital raised in all of 2020, mainly due to an extraordinary number of mega-rounds (over $ 100 million each), which reflected 51% of the total capital raised in Q1-Q3 / 2021. In the third quarter of 2021, 177 fundraising rounds were conducted that totaled $ 5.89 billion, as a continuation of a trend that began in the first quarter of this year.
Adv. Mike Rimon, partner at the Meitar law firm Notes that “in parallel with a certain slowdown in the rate of initial public offerings of Israeli high-tech companies, we expect continued significant activity in raising capital as well as an increase in the number of mergers and acquisitions, given the growing number of companies raising significant amounts, including public offerings.” And in private recruitment. Another phenomenon that we have begun to see and we expect to increase in the near future is acquisitions of Israeli companies by other Israeli companies, which until a few years ago did not constitute a significant exit channel. ”
Mariana Shapira, Director of Research at IVC, She added: “We observed the current upward trend from March 2021, when monthly averages rose to $ 1.98 billion during the first three quarters of 2021, compared to a monthly average of $ 864 million in 2020, as more mature companies established trust with foreign investors and set themselves as a target Stable for later investments (Growth). We believe that at least in the near future the trend will continue. “
Shira Azran, a partner in the Meitar law firm She added that “in these data we continue to see the impact of the corona on our lives. High-tech has gained momentum following the transition to digitization and cloud services in all areas, and with them cyber. Capital continues to flow to high-tech companies, and along with the continued growth of mature companies, we see two significant phenomena – an increase in the amount of lime rounds and capital invested in these rounds, and the presence of American funds from all stages in Israel. We expect this trend to continue until the end of the year and next year as well. ”
Mega-rounds (of more than $ 100 million) differentiated Q1-Q3 / 2021 from previous years, with 53 such rounds totaling $ 9 billion during this period, a significant increase due to a sharp increase in the number of high-value companies and start-ups defined as “Unicorns” (companies whose value is estimated at over $ 1 billion) in the Israeli technology industry.
Diagram 2: Recruitment of Israeli high-tech companies – mega-rounds, Q1/2015 – Q3/2021
Early Seed + A rounds were on the rise during Q1-Q3 / 2021: $ 2.5 billion was raised in 293 transactions, an increase of 35% of the total capital raised throughout 2020. The median investment in these rounds reached $ 4 million – testimony For an increase in the amount of capital allocated to early rounds.
The amounts in the later rounds of fundraising also continued to climb in Q1-Q3 / 2021, with $ 15.3 billion (85% of the total amount of transactions in this period) raised in 282 transactions. This increase was mainly due to the peak amounts invested by foreign investors: $ 4.3 billion invested in the third quarter of 2021 alone, compared to a quarterly average of $ 1.86 billion in 2020. Israeli investors also increased their involvement in transactions, but the increase was much more modest.
The number of follow-on investments – which reflect investors ‘belief that the value of the companies in which they have invested in the past will increase – also climbed during Q1-Q3 / 2021 as part of investors’ efforts to support the progress of local companies.
Exits of Israeli high-tech companies
During Q1-Q3 / 2021, the number of exits of Israeli high-tech companies soared to a peak of 180 transactions totaling $ 18.92 billion, mainly the number of initial public offerings (IPOs) which jumped to 65 in Q1-Q3 / 2021, when the total amount raised Accounted for 52% of the total capital of the exits during this period.
The dollar volume of mergers and acquisitions in Israeli high-tech during Q1-Q3 / 2021 reached $ 9.14 billion and exceeded the volume of transactions in 2020 as a whole. Five mergers and acquisitions were valued at over $ 500 million each, totaling $ 2.76 billion.
During the first nine months of the year, 65 Israeli high-tech companies became public companies through initial public offerings of $ 9.78 billion, an increase of 225% in number and 506% in the amount of capital raised compared to 2020 as a whole. The total value of the companies at the beginning of their trading was $ 76.4 billion. The two most notable initial public offerings in the third quarter of 2021 were made by Riskified ($ 418 million) and REE Automotive ($ 288 million). 42 Israeli high-tech companies preferred to become public on the Israeli stock exchange – TASE.