IVC-GROSS | Investors Report 2021

We are pleased to share with our clients a data report of venture capital fund activity in Israel during the year 2021 and the first half of 2022, published in collaboration with IVC, the leading data source and business information company serving Israel’s high-tech industry.

Venture capital funds are key players in the Israeli high-tech ecosystem and provide the main source of funding for start-ups.

The Gross – IVC Report (the “Report”) reviews the trends and activities of investors and venture capital funds. The Report outlines many key aspects of these activities, such as the amount of capital raised by the funds, total investments made by each fund, the number of funding rounds and more.

The purpose of the Report is to provide an in-depth analysis of the ecosystem and the key players financing the Israeli start-up industry, and to analyze the trends that characterized 2021 and the first half of 2022.

The Report reviews, among other things, the following topics:

• The 20 largest venture capital management companies in Israel (based on assets under management).
• The scope of fundraising in Israel in the years 2015-2021, including a breakdown of all venture capital funds which raised in 2021.
• Ranking of the most active funds in Israel, inter alia, by breaking the funds into separate categories: (i) foreign funds, (ii) large Israeli funds, (iii) medium Israeli funds, and (iv) micro funds.
• The ratio between investments by foreign funds and Israeli funds (number of rounds, invested amounts, and more).
• The main investment areas (verticals) of funds.
• Activities of R&D partnerships traded on the Tel Aviv Stock Exchange.
• Corporate VC activity.

The following are some conclusions and trends that emerged from the analysis of the data and are presented in the Report –

• In 2020 and 2021, Israeli venture capital funds raised over $8 billion. The capital raised in 2020 and 2021 by Israeli funds, is mostly available for investments in new companies and also for support for existing companies.
• In the first quarter of 2022, Israeli venture capital funds raised over $1 billion.
• In 2021, the most prominent investors in the Israeli high-tech industry were Insight Partners (a client of our firm) and the Our Crowd platform, each with more than 30 investments in that year.
• The ratio of foreign funds to Israeli funds was 3:1in 2021, compared to 2:1 in 2020, i.e., the increase in the volume of investments in Israeli high-tech in 2021 was largely due to an increase in foreign investor activity.
• In light of the slowdown we have been experiencing in recent months, there is concern of a significant decline in the volume of foreign investor activity. Despite the fact that in the first quarter of 2022 the effect of the trend has not yet been reflected, we anticipate that this will be reflected in the annual summary.
• Nine Israeli management companies each manage over $1 billion in venture capital funds. Among the leading funds in Israel, there are quite a few new players that began operating in recent years, alongside veteran funds that have been operating for 25-30 years.
• The Report shows that public R&D partnerships (public venture capital funds) have not become a prominent investment channel in Israeli high-tech.

To read the full report click here.

For more details regarding this report, you are invited to contact the High-Tech and Venture Capital Department by telephone: 03-6074547, or Dr. Ayal Shenhav, Head of the Hi-Tech and Venture Capital Department by e-mail: ayal@gkh-law.com.

Gross & Co. Law Firm is one of the leading law firms in Israel, with over 220 attorneys. Gross & Co. specializes, both in Israel and abroad, in various fields of law including Mergers and Acquisitions, Capital Markets, Hi-Tech and Venture Capital, Healthcare and Life Science, Banking, Real Estate, Litigation, Antitrust, Energy & Project Financing, Administrative Law, Tenders and Municipal Government, Infrastructure, Environmental Law, Sustainability–ESG and Cleantech, Intellectual Property, Labor Law and Tax.

This alert is prepared as an informational service to clients and colleagues of Gross & Co. and the information presented is not intended to provide legal opinions or advice. Readers should seek professional legal advice regarding the matters about which they are particularly concerned.