Venture capitalists have increased their investments in Israeli start-ups in the third quarter, reversing the recent trend of retreating from the troubled market, according to the latest figures from VentureOne.
The survey said that there was a 24 per cent rise in the total amount invested in start-ups to $265.9m. There were 42 investments in total, the same number as in the previous quarter, which produced an increase in the median amount invested to $5.5m from $3 m.
The collapse in global technology markets, political instability in the region, and an unsympathetic tax regime have all been blamed for the falls in venture capital investment in Israel over the course of the last year.
Early-stage firms receive the lion’s share of venture capital investment in Israel, reflecting the importance of the country’s technology base and the fact that companies often relocate to the US or Europe as they mature. There has, however, been a gradual shift towards later stage investment, which accounted for 36 per cent of the total in the third quarter.
Contrary to the pattern seen elsewhere in the world, investors have upped their valuation of Israeli private companies in the latest quarter. The median pre-money valuation increased to $11.9m, up from $8.5m in the second quarter.
In the year-to-date, the median pre-money valuation for venture-backed firms has been $13m, up from $12m the year before.
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