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Israeli high-tech companies are getting increasing air-time in international news organizations and it seems the hype is justified. In the second quarter of 2014, Israeli high-tech firms have raised a record-breaking $930 million, the Israeli High-Tech and Venture Capital Database (IVC) reported.
According to the IVC Research Center, the second quarter financial statistics for 2014 show a 38 percent increase in funds raised by high-tech companies in comparison to the first quarter of this year, with each of the 175 companies that raised money collecting an average of $5.3 million in investments. In addition, the spike in investment marks the impressive growth of nearly 100 percent since the end of 2013, numbers which clearly convey the strong faith placed by international and local investors in Israeli high-tech companies and management.
Israel’s maturing market attracts investment
Ofer Sela, Technology Partner at KPMG tells NoCamels that this quarter’s investments are particularly outstanding as Israel’s stock exchange has only been around for a total 20 years. As Sela explains, “The recent spike in investments is due to the fact that the amount of private, venture capital-backed companies in Israel has hit new heights, and these companies attract a lot of investment from aboard. Israel is definitely on the ‘to-do list’ of a number of big name venture capital firms, hence the excellent results for Israel companies.”
Chart 1: Israeli High-Tech Capital Raising ($m)
Sela also points out that investment continues to pour in because of the cyclical “feeder” nature of the Israeli high-tech sector that used to encourage fast exit strategies, but today produces more mature, future-driven companies. “In the past, companies were pressured to make exits in very early stages, but since the American stock market became open to foreign companies in 2008, Israeli companies want to stick around longer and go for a big initial public offering (IPO), a financial ‘home run.’”
Sela also posits that Israeli startups which achieved success in 2010 and 2011, like Waze for example, have come back with the same management and business sense, but different goals and companies, to easily secure the trust of some of the world’s most lucrative investors and venture capitalists purely based on their experience.
Having the ‘Steve Jobs of printing’, Benny Landa, doesn’t hurt
If there is one name that stands out among the list of the companies that won big in the second quarter of 2014, its Benny Landa’s Landa Nanography. The digital printing mogul, often referred to as the “father of commercial digital printing”, or as Sela calls him the “Steve Jobs of Printing,” got into the printing business in the seventies when he founded Indigo Digital Printing, creating the world’s first digital color printing press. Now, one company later (Indigo sold to Hewlett-Packard in 2002 for $830 million), Landa has a new nanographic printing company called Landa Nanography, which raised an impressive $135 million from ALTANA Group in Germany and seriously contributed to this quarter’s investment spike.
As more startups pop-up in the Startup Nation each day, it’s easy to guess that impressive investment numbers like those achieved this quarter will continue to roll in, especially as the Israeli market matures and as high-tech companies realize the value of sticking around.
Photos: ronsho/ IVC Research Center
By Maya Yarowsky,