For the first time in decades Israeli institutional investors increase their investment in Israeli startups 6.5-fold
According to a report conducted by IVC, Arnon Segev & Co., Consiglieri and in collaboration with the Israel Innovation Authority published today.
In 2021, Israeli institutional investors increased their allocation to the Israeli start-up scene, for the first time in decades. Astoundingly, the capital allocated to the Israeli tech start-up sector in 2021 increased 6.5-fold and is estimated at $864m, compared with just $134m in 2020.
While the usual investment pattern for institutional investors in the private market is late-stage companies with relatively large amounts per company, the activity of the Israeli institutional investors during 2021 resembled that of PE funds, with investment deals in companies in various stages, subject to a wide range of investment amounts.
Israeli institutional investors accounted for 26% –36% of amounts invested by VCs in Q1/2021 –Q3/2021, far above their 7% –11% share in 2020, signaling the intensity the institutional players relate to this investment landscape. However, in Q4/2021 this share reduced substantially to 12% only.
The technology verticals that attracted the local institutional money included mainly Fintech, Insurtech, and DeepTech. Cyber Security deals garnered much less attention than expected at the outset.