With a record $23 billion (USD) in Israeli startup investments and more than $25 billion in mergers and acquisitions, 2021 was the best year ever for Israeli Hi-Tech. Israeli venture capital firms had a successful year, raising over $4.5 billion in a 20% improvement from 2020. Q1 of 2022 showed similarly promising investment, notably including Intel’s recent acquisition of Tower Semiconductors for over approximately $5.4 billion.
However, slowing global markets have led some to predict a downturn in foreign investments in 2022. Fears of a global economic crisis have decreased investment and damaged IPO valuations across the globe. Fortunately, Israel’s Hi-Tech sector is in a favorable position to weather the economic storm. Particularly strong investment in 2021 and Q1 of 2022 have saturated Israel’s startups with the funds needed to sustain operations in the future. Israeli Hi-Tech’s resilience in the face of previous global economic challenges also bodes well for its performance in the coming months.
This relative strength is evident in the recent Israeli Tech Review report by IVC and LeumiTech, which found that Israeli tech firms raised nearly $10 billion in the first half of 2022. According to the report, Israeli companies are on track to end 2022 with higher figures than all of 2020, which had previously set an investment record. Timor Arbel-Sadras, the CEO of LeumiTech, stated that demand for technological products across all sectors remains stable. Arbel-Sadras also noted particular stability regarding funding rounds under $50 million, demonstrating strong continued interest in early-stage investments.
Below is a list of the most active Israeli venture capital firms, who are leading the way in domestic Hi-Tech investment:
OurCrowd vets and selects companies, invests its own capital, and invites its accredited membership of investors and institutional partners to invest alongside in these opportunities. OurCrowd provides support to its portfolio companies, assigns industry experts as mentors, and creates growth opportunities through its network of strategic multinational partnerships.
Vertex Ventures is an Israeli venture capital investment firm founded in 1997, with over $1B under management. The firm invests in Israeli companies in the early stages of development and with proven leadership abilities for achieving success.
Entrée Capital provides multi-stage funding to innovative seed, early and growth-stage companies all over the world. Entrée Capital manages over $1B and has invested in startups such as monday.com, Snap, Stripe, Deliveroo, PostMates, Riskified, FundBox, Toka Cyber, Kuda Bank, Stash, PillPack, Gusto, Cazoo, Coupang, Glovo, and over 100 other companies.
Pitango Venture Capital is an Israeli venture capital firm with over $2.8 billion under management and investments in more than 250 companies. Pitango invest in core technology across all stages, via three parallel funds: Pitango Earlystage, Pitango Growth and Pitango Health. Its focus is diversified and balanced across investment stages and technology sectors.
Hanaco Venture Capital backs early-stage technology companies with bold, visionary, and passionate Israeli entrepreneurs aiming for significant markets with disruptive technologies. The firm was founded by Alon Lifshitz, Lior Prosor, and Pasha Romanovski. It has offices in Tel Aviv and New York City.
Vintage Investment Partners is a global venture platform combining Secondary Funds, Direct Co-Investment Funds, and Fund-of-Funds. With over $3 billion AUM across 12 funds in Israel, Europe, and the U.S., the firm is invested in several of the world’s leading venture funds and late-stage startups and has exposure directly and indirectly to over 2,200 technology companies.
Glilot Capital Partners is a seed and early-stage VC, investing in Israel’s brightest and most extraordinary entrepreneurs. Its entrepreneur-centric approach, including being one of the few VCs in the world that share revenue with the entrepreneurs they back, coupled with its experience in finding the right business opportunities, has positioned Glilot Capital in the top 5 best-performing Venture Capital Funds in the world (Vintage years: 2010-2014), for five years in a row, according to Preqin.
Peregrine Ventures is an Israeli venture capital fund investing in promising early-stage high-tech companies with a strong emphasis on life sciences and digital health. Working closely with entrepreneurs, Peregrine Ventures and its technological incubator, Incentive, have earned a solid reputation for transforming innovative technologies into lucrative companies with a significant global presence.
Aleph is an early stage venture capital fund focused on partnering with great Israeli entrepreneurs to build large, meaningful companies and impactful global brands. Aleph has invested in over 50 companies (not all announced) including Lemonade, Melio, Healthy.io, JoyTunes, Fabric, Honeybook and Bringg.
Viola Ventures is a venture capital firm that invests in Israeli or Israeli-related early-stage companies that can lead to transformational companies. With a portfolio of over 100 companies, Viola Ventures has backed a substantial share of Israel’s exits to date, including 8 of Israel’s unicorns such as ironSource, Payoneer, Outbrain, Immunai, Pagaya, Redis, Lightricks and more.
Sources: Start-Up Nation Central, The Times of Israel, IVC-Gross Investors Report 2021 (June 2022)