Venture Capital in Israel

Venture capital in Israel has rapidly developed from the early 1990s. Today, about 70 venture capital funds are active, of which 14 international VCs with Israeli offices and additional 220 international funds which actively invest in Israel.

Israel's thriving venture capital and business incubator industry played an important role in the booming high-tech sector, which gave it the nickname “Silicon Wadi”, considered second in importance only to its Californian counterpart.

International Venture Capital Firms

Several leading U.S. and European VC funds have Israeli branches, namely Alta Berkeley Venture Partners, Battery Ventures, Bessemer Venture Partners (BVP), BlueRun Ventures (BRV; formerly Nokia Venture Partners), Blumberg Capital, Bridge Capital Fund (BCF) LP, Canaan Partners, Defta Partners, Lightspeed Venture Partners, Partech International Inc., Susquehanna Growth Equity (SGE) LLC, Venrock, YL Ventures, and Ziegler Meditech Equity Partners (ZMEP) LP.

Additionally, there are some 220 international funds, including Polaris Venture Partners, Accel Partners and Greylock Partners, that do not have offices in Israel, but actively invest in Israel through an in-house specialist.

The VC divisions of leading multinationals, among them Intel, HP, Time Warner Inc., Sony, Cisco…. which have opened R&D centers in Israel and acquired companies in Israel, have also found that the country offers a profitable VC
market.

Delivering Successful Exits

Mergers & Acquisitions: In 2011, there were 85 mergers and acquisitions (of Israeli companies) in the Israeli market worth a total of $5.23 billion, a 134% increase from $2.18 billion in 2010 and the second highest amount in a decade, after the $10 billion worth of deals in 2006.

The average deal size in 2011 increased nearly 85% to $60 million from
$32.5 million in 2010. This increase reflects a relatively high number of deals above $100 million, with M&As of Israeli VC-backed companies in 2011 totaled $12.52 billion, a 102% increase from 2010.