Israeli VCs raised US$914-million in 2014, the most in six years

Israel is, without doubt, one of the most exciting startup hotspots on the planet. If it’s not the admiring government support, it’s the succinct financial support being made available as this new findings come to show.

A new report by IVC Research Online shows that the Venture Capital (VC) cookie jar got filled to the brim in 2014. Twelve VC firms managed to raise nearly US$1-billion with the average fund size of US$76-million which is an increase of 55%.

These numbers, which are the highest the country has seen since 2008, are mostly due to four veteran Israeli VC funds — Carmel Ventures, Magma, JVP and Vintage — that raised over US$100-million each and accounts for 64% of the total 12. Carmel Ventures raised the most, leading with a massive US$194-million.

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The report also found that while these high-roller VC funds make up most of the market, 14% or US$439-million comes from micro investment firms — funds which account for less than US$50-million. However, only three new such funds emerged in 2014, showing a decline in popularity compared to previous years. Koby Simana, IVC CEO elaborates on this trend:

A favorable window of opportunity for fund raising, has enabled a number of management companies to progress from a micro VC model to mid-size range, which offers more investment flexibility. Funds having scaled up include Amiti Ventures and Glilot Capital, but it remains to be seen if more of the existing micro-VC funds will follow suit or choose to maintain the micro VC fund model.

As the graph above shows, last year wasn’t a fluke. As IVC points out, at the beginning of 2015 some US$1.8-billion was available for investment by Israeli VCs. Of this amount, US$462-million (25%) is earmarked for first investments. The remainder is reserved for follow-on investments.

Image by BSHWEDEL via Flickr