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Israeli venture investment sees slight improvement in third quarter of 2003

Venture capital investment in Israeli high-tech companies increased by four per cent in Q3 2003 on the previous quarter. The communications sector saw the biggest increase in investment while the life sciences sector experienced a decline, according to the latest figures from the Israel Venture Capital Research Centre (IVC).

A total of 103 Israeli companies raised $283m, from both domestic and international venture investors, compared to $271m in the previous quarter and up 34 per cent from the first quarter of the year. But total investments for the year to date are still down 18 per cent on the corresponding period in 2002.

‘A review of capital raising trends in the first three quarters of the year shows a turnaround is underway,' said Guy Holtzman, general manager of the IVC. ‘This indicates that capital raising by Israeli companies will top $1bn in 2003, and we are projecting another $1bn plus year for 2004.'

Holtzman also noted that ‘capital raised by Israeli firms was 50 per cent of that raised in all European countries. Furthermore, if one compares the Israeli venture capital industry to the US, we'll find a slower rate of decrease in investment during 2003'.

The communications sector attracted the majority of funds raised. Thirty communications companies raised $118m, 41 per cent of the total value of investments. Investment in life sciences declined with 24 companies raising $28m or ten per cent of the total, compared with 21 companies raising $51m or 21 per cent of the total in the second quarter.

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