Overview: Entrepreneurs, Companies, Investors and Major Trends 2015-2020
February 2021
ISRAELI TECH
ECOSYSTEM
Established in 1997, IVC is the best source for information, research and insights into the thriving Israeli technology.
COVERAGE:
• 9,538
Active startups
• 2,524
Investors
• 36,144
Key Executives
• 390
Multinational Corporates
• 411
Accelerators & Startups Communities
About IVC
We provide the most comprehensive, accurate, updated data, research and insights on Israel’s tech ecosystem, startups, Private Equity and Venture Capital.
IVC addresses organizations of any sort which have interest in the innovative and fast-growing Israeli high-tech ecosystem. Among our clients: strategic & financial investors, foreign and local VC funds, Family offices, Angels, CVC, PE funds, Fund of Funds, Incubators & Accelerators, service providers, NGO’s, government entities, multinational corporations, academy, technology transfer companies, start-ups, research institutions, entrepreneurs and more.
Vision & Mission: The Israeli high-tech ecosystem becomes bigger and mature, IVC’s mission is to continue
collecting and analyzing relevant data in order to provide our clients with the most accurate and in-depth
information which assists them to formulate their scouting efforts, strategy and position in the Israeli market.
ISRAELI ECONOMY AND GENERAL INFORMATION
ISRAEL at a Glance
Population 05/20 Area GDP Growth (Q3/2020) GDP (Q3/2020) GDP/PER Capita (Q3/2020) Ratio of National Debt/GDP
(2019)
9,136M 22,145 Sq/Km -4.4% 350.6B (NIS) $41,100 60.0%
Investment in R&D (2018) Inflation Rate Unemployment Rate Employees OECD Credit Rating
4.95% of GDP -0.6% 4.5% 3.9m Full Membership since 2010 Pitch A+
Global Industry Leaders on Israeli High-Tech
“"Israel is a technological superpower."
Founder and CEO, Tesla, SpaceX
Elon Musk Jack Ma
"people here are born to believe - 'Never give up. This mentality is what has made Israel a miracle in only 70 years."
Founder, Alibaba
“If you’re going to the Middle East to look for oil, you can skip Israel. If you’re looking for brains, look no further. Israel has shown that it has a
disproportionate amount of brains and energy.”
“Israel is a major player in the high-tech world…There is a greater concentration of talented high-tech manpower here in comparison to other countries – almost to the extent of Silicon Valley.”
Warren Buffet
Bill Gates Tim Cook
“We have an enormous admiration for Israel, not just as an important ally for the U.S. but as a place to do business. Apple looks on Israel as a strategic market full of unique capabilities ” CEO, Apple
CEO, NVIDIA
"One of the things I've learned about Israeli companies is that everyone wants them. I don't know of any large company in the world today that doesn't want to be in Israel. Ask the bankers - all of the companies wanted Mellanox. Look at me - I won,"
Jensen Huang
Global recognition as a leading innovative
technology center
2ndonly to Silicon
Valley in innovation
Growth engine of
the economy
Human Capital emerged as
Israel’s principal resource
VC Investments Global Comparison, 2019-2020
Source: Statista
28
32 31
26
29 29
38 37
20
16 17
15 17
15
24
31
8 10
8 7 7 7 9 10
1.5 2 2.2 2.2 2.6 2 3 2.8
Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20
North America Asia Europe Israel
414.2
282.1 264.8
129.2
63.6 58 20
VC Investments per Capita ($), Q3/2019Source: PwC MoneyTree 2020& IVC
1st in the world by R&D Spending, Q3/2020 Israel | South Korea | Switzerland | Sweden | Japan | Source: World Bank
Global dollar funding: North America, Asia, Europe and Israel, $B, 2019-2020
Total Exits $121,987M (1371 deals) Total M&A’s $116,850M (1271 deals)
Total IPOs $6,025M (100 deals)
$65,356M investments in Israeli tech companies
$18,869M were raised by 190 Israeli VC funds, mostly from
foreign investors More than 11,074 Startups
2503 Investors
406 Accelerators and Incubators 389 Active MNC
Israel High-Tech Industry since 2010 at a Glance
27 listed in US STOCK
EXCHANGES
F o rw a rd
Informal
Creative
Ambitious
Non-Conventional
Commu n ica ti ve
Improvisation
Innovative Experimental
Independent thinking
“Chutzpah”
V is io n In te g rity
Personal Example
Courage
Out-of-the-box
Persistent
Hard Working
Team Family
Action Driven
E d u ca ti on Competitive
F ri en dship
Fast Movers
Inquisitive Restless
• Challenging - question everything
• Strong drive, must-win attitude
• Knock on every door
• Solution-driven approach to real problems pros
• Cost-effective use of limited resources
• Going global from inception
• Learn from mistakes – tolerate failures
• Short history – past is not a constraint
• Rewarding – financial, prestige, popular
Israel Entrepreneurship DNA Attitude, Characteristics, Culture
Drivers of Innovation and Success
Entrepreneurial Culture
Strong Cooperation
Educated Human Resources
Quality Academic Institutions
Smart Money, Mainly Foreign
Strong Presence of Multinationals Proven Exit
Avenues
Commercialization Government
Support
Modern Infrastructure
Academic institutions, Government, Industry, Defense, Silicon Valley
Skilled engineers, military service, elite
units, immigration )1991 Russia(
Research, scientists, 12 Nobel prize winners, IP-patents, Weitzman
Institute, Technion
Food chain: VC funds, CVCs, PE, angels,
incubators, accelerators
All sectors, regions, strategic – product needs, clients, DD,
capital, exits M&A is the main
avenue, improved performance
Defense-developed innovative technologies,
basic science, academic research
Innovation Authority special programs: grants,
incubators, human resources; tax incentives
Legal, banking, financial, accounting,
IP protection High quality startups, serial
entrepreneurs, technology clusters, one hub
Israeli Tech Ecosystem Critical Mass of Success Elements
Haifa
Haifa is an industrial zone and a tech hub. It hosts leading companies such as
Microsoft, Intel and Google and academic institutes
Tel Aviv
Tel Aviv is one of the greatest tech hubs in the world; it has the highest number of startups per capita in the globe and the highest investment of
GDP in R&D
Herzliya
In Herzliya high-tech park there are 60+ startups and large companies, including Apple’s R&D center, and
Microsoft
Upper Galilee
Foodtech, AgroTech, ii2020 – emphasize on periphery
Beer Sheva
Cyber Center - a joint venture of the Israeli National Cyber Bureau, Beer Sheva Municipality, Ben Gurion University and leading
global companies in the cybersecurity industry
Jerusalem
The city already has 440+ active technology companies
The Israeli
High-Tech
Main Hubs
More IPOs
Israeli tech companies reached a maturity level that enabled them to turn to capital markets as a viable exit alternative. In 2020, Israeli companies made 121
funding deals raising $6.55B on the capital markets, compared to $1.95B in 2019. Deals included IPOs, follow-on offerings, PIPEs, and registered direct deals
(RDs), covering equity and debt (straight and convertible) through primary and secondary offerings.
Continued Growth
Israeli tech ecosystem continued to grow in 2020, despite the COVID-19 pandemic.
Investments totaled $10 billion in 607 deals, exceeding 2019 results by 31% in capital and 20% in the number of deals.
Investments in Growth Companies
Deals over $100m equaled one-third of the total investment’s amount. There were 20 deals of above
$100 million and 96 deals of above $30 million in 2020 (compared to 18 and 65 in 2019, respectively).
These investments provided growth companies with substantial financing for their long-term
expansion strategies
.
Early Rounds Israeli Venture Capital Funds
The share of Israeli VCs in the overall VC investments keeps shrinking. In 2020, Israeli VCs captured just 15% of total VC investments
than 18% in 2015-2019.
A decline in M&A activity
The Covid-19 pandemic slowed M&A activity. During 2020 there were no M&As
larger than $5B. While the total of M&As smaller than $1B shrunk to a total of $3.11 billion (compared to 9.718 billion in 2019), M&As amounts in the range of $1-5 billion
grew compared to 2019.
The Israeli
Tech
Ecosystem 2020
Trends
During the first half of 2020, IVC saw a sharp downtrend in early financing rounds.
The sentiment changed in H2/2020 when investors returned and infused average amounts to
early-stage companies.
1362 1248 1124 920
806 337
2015 2016 2017 2018 2019
*2020
The Israeli high-tech industry continues to produce about 1,000 new innovative companies every year
9500+ ACTIVE COMPANIES
Israel High-Tech Newly Established Companies by Year, 2015-2020
# of Established
* IVC Estimation, final figures for 2020 will be more accurate around Q3/2021
313
Leading Israeli Unicorns, 2020
(*Valuation in last round was higher than $2B) (*Valuation in last round was higher than $1B)
Added Value of Multinationals Presence in Israel, from all Region & Sectors
193 124 107 84 75 60 59 57 57 52 42 32 30 24 23 20 19 19 17 15
Artificial Intelligence Machine Learning IoT Big Data Cyber Security Industry 4.0 SaaS Automotive FinTech Digital Health Machine Vision RetailTech Insurtech SportsTech Smart City Augmented Reality PropTech Adtech Blockchain Marketing Tech
Israeli High-Tech - CVCs Activity (Corporate Venture Capital), 2015-2020
2,624
1,802 2,030
780
2,449 2,879
27
24
20
27
20
23
2015 2016 2017 2018 2019 2020
Corporate-Backed Exits
1,173 1,724 1,714
2,445
2,067
2,917
135 147 147
191
129
154
2015 2016 2017 2018 2019 2020
Corporate-Backed Investments
Active Israeli CVC-Backed Tech Companies by Tech Verticals, 2015-2020
Tech Verticals
$M
# of deals
# of Active CVC-Backed Companies
$M
# of deals
1300
3358
4141 631
0 500 1000 1500 2000 2500 3000 3500 4000 4500
Seed R&D Initial Revenues
Revenue Growth
14%
44% 35%
7%
Discovering new knowledge about products, processes, and services, and then applying that knowledge to create new and improved products, processes, and services that fill market needs.
A company whose yearly revenue does not exceed $10 million dollars.
A startup company, which is in its early days of product development and fund raising.
A company whose yearly revenues exceed $10 million dollars and has a double-digit yearly growth rate.
Active High-Tech Companies by Stage
Israeli Tech - Totals $m 2015-2020
3,435 4,290 4,531
5,843
7,799
10,178 7,712
9,957
8,025
12,159
14,268
7,968
10,255
874 1,230 1,480 1,951
6,961
2015 2016 2017 2018 2019 2020
Investments $m
M&As $m
Public Offerings $m
Source: IVC-Meitar The Israeli Tech Review 2020
407 429 432
512 506
607
128 127 131 119 144
79 51 70 66 68 12899
2015 2016 2017 2018 2019 2020
Source: IVC-Meitar The Israeli Tech Review 2020
# of Transactions
# of M&As
# Public Offerings
Israeli Tech – Total Number of Transactions 2015-2020
M&As: consistent with the exit's methodology, M&As include buyouts and exclude exits of $5B and above.
PIPE deals analysis is part of the Public Offerings section
Public Offerings include
Teva $7.24B public
offering in 2015
Investments in Mid - Later Rounds $m, 2015-2020 Annual Number of Deals in Mid - Later Rounds, 2015-2020
Source: IVC-Meitar The Israeli Tech Review 2020
79
60
82
101 89
129
46 42
34 33
55 62
35 41 48 55
43
76
2015 2016 2017 2018 2019 2020 So
urce: IVC-Meitar The Israeli Tech Review 2020
Israeli High-Tech Investments | 2015-2020
1,101 737 888 783 1,208 909 1,706 1,113 1,581 2,120 2,309 1,795
702 1,406 1,381 1,383
2,281
4,283
2015 2016 2017 2018 2019 2020
B Rounds $m C Rounds $m Later Rounds $m # of B Rounds # of C Rounds # of Later Rounds
3,435 4,290 4,531
5,843
7,799
10,178
407 429 432 512 506
607
2015 2016 2017 2018 2019 2020
Total $m # of Deals
Source: IVC-Meitar The Israeli Tech Review 2020
358 683 783 1,040 1,704
2,680 464
610 554
804
1,822
1,483
53
69 108
286
326
391
335
718 742
920
930
1,512
2015 2016 2017 2018 2019 2020
Number of Transactions by Verticals, 2015-2020
Source: IVC-Meitar The Israeli Tech Review 2020
Source: IVC-Meitar The Israeli Tech Review 2020
Cyber Security Fintech FoodTech IoT
The investment trends in Tech Verticals continue to support the growth of the Israeli main technological clusters: Cyber Security, Fintech and IoT, which got the biggest checks in 2020.
Nevertheless, the number of deals in FoodTech
companies continues to grow. The overall small amounts invested in this cluster, imply that the companies in that field are still young.
50
68
74
85
69
79
42
51 52
75 77
91
51 54 51
62 57
67
11 12
24 26 29
41
2015 2016 2017 2018 2019 2020
Cyber Security Fintech FoodTech
IoT
Israeli High-Tech Exits by Deal Type, 2015-2020
Israeli High-Tech M&As, 2015-2020
20
Buyouts $m IPOs $m M&As $m # of Buyouts # of IPOs # of M&As
Source: IVC-Meitar The Israeli Tech Review 2020
1,185 1,110 1,394
3,361
2,014
4,035
609 26 440 250 424 1,610
6,527
8,847
6,631
8,798
12,254
3,933
5 4
9 8 7
4
8 6
13 8 9 19
123 123 122
111
137
95
0 20 40 60 80 100 120 140 160
- 2,000 4,000 6,000 8,000 10,000 12,000 14,000
2015 2016 2017 2018 2019 2020
7,712 9,957
8,025
12,159 14,268
7,968
128 127 131 119 144
99
2015 2016 2017 2018 2019 2020
* Excluding M&As of $5B and above.
* Including M&As & Buyouts
M&As $m
# of M&As
Source: IVC-Meitar The Israeli Tech Review 2020
2018 2018
2018
2019 2019
2020 2020
Acquired by Google For $1.19B Acquired by D+H
For $1.25B
Acquired by Covidien For $970m Acquired by
Rakuten Inc.
For $900m
Acquired by Apax Partners
& JMI Equity For $1B Acquired by
Cisco For $5B Acquired by
Medtronic For $1.6B
Acquired by KLA-Tencor For $3.4B
Acquired by Giant Interactive For $4.4B Acquired by
Thoma Bravo For $2.1B
Acquired by Mitsubishi Tanabe Pharma
For $1.1B
Acquired by Intel For $15.3B
Acquired by Nvidia For $7.4B Acquired by
Nuvei For
$889m Acquired by
Salesforce For $1.35B Acquired by
Hellman &
Friedman For $1.15B
2020
Acquired byIntel For $1B Acquired by Insight
Partners ($1B) and CapitalG (Google) ($100m) For $1.1B
US Companies are majority of the acquirers IBM, Intel, Google, Microsoft, Amazon, Palo Alto Networks, Facebook and many more
2019
2015 2014
Israeli High-Tech Top M&As in 2012-2020
2017 2017 2016
2013 2013 2012 2012
Over 100 Israeli Technology Companies are Publicly Traded on NASDAQ
Market cap
$13.5B
Market cap
$16.5B
Market cap
$15.4B
Market cap
$9.8B
Market cap
$3.3B
Market cap
$12.6B
Market cap
$3.2B
Market cap
$2.1B
Market cap
$6.2B
Market cap
$1B
Market cap
$9.6B Market cap
$6.6B
Market cap
$3.5B
Market cap
$8.1B
Notable Israeli Technology Companies Traded on Global Public Markets
Market cap
$6.1B
Leading Technology Clusters,
Matching Global Technology Trends and Demands
Cyber AI
Fintech
Israeli High-Tech Leading Clusters
459 816 936 1024 2054 3043
86 94 92
134
108 95
2015 2016 2017 2018 2019 2020
575 730 730 1050 1960 2150
100
117 117
128
97
79
2015 2016 2017 2018 2019 2020
1039 1071 2018 2840 4590 4430
239 251
333
378
388
299
2015 2016 2017 2018 2019 2020
Foodtech
117 12 190 416 393 432
33 40
51
67
56 49
2015 2016 2017 2018 2019 2020
117
# of deals
Cyber $M Fintech $M AI $M Foodtech $M
61 57 51 41 33 21
2015 2016 2017 2018 2019 2020*
443 Active Cyber Companies
Israeli Cyber Companies
110 Acquired/Merged
459 816 936 1024 2054 3043
86 94 92
134
108 95
2015 2016 2017 2018 2019 2020
Investments in Cyber Security Companies ($m, #), 2015-2020
1040 574 1036 2018 2057 4004
20
14 14 14
22
16
2015 2016 2017 2018 2019 2020
Newly Established Cyber Companies
Exits by Cyber Companies ($m, #), 2015-2020
*2020 details are not final
$M
# of deals
$M
# of deals
Israeli Fintech Companies
698 Active Fintech Companies
76 Acquired/Merged
Investments in Israeli Fintech Companies ($m, #), 2015-2020
575 730 730 1050 1960 2150
100
117 117
128
97
79
2015 2016 2017 2018 2019 2020
$M
# of deals
Exits by Fintech Companies ($m, #), 2015-2020
2280 56 12 1080 906
14
8
6
10
17
13
2015 2016 2017 2018 2019 2020
56 12 170
$M
# of deals
81 70
92 82 45
11
2015 2016 2017 2018 2019 2020*
Newly Established Fintech Companies
*2020 details are not final
Israeli AI Companies
1649 Active AI Companies
131 Acquired/Merged
Israel High-Tech - AI Companies ($m, #), 2015-2020
1039 1071 2018 2840 4590 4430
239 251
333
378
388
299
2015 2016 2017 2018 2019 2020
$M
# of deals
Exits by AI Companies ($m, #), 2015-2020
$M
# of deals
350 237 15700 2600
10 14
22 17
35
30
2015 2016 2017 2018 2019 2020
350 236
1180 1129
159
225 229
252 191
96
2015 2016 2017 2018 2019 2020*
Newly Established AI Companies
*2020 details are not final
Israeli Foodtech Companies
Israel High-Tech - Foodtech Companies ($m, #), 2015-2020
$M
# of deals
117 12 190 416 393 432
33 40
51
67
56 49
2015 2016 2017 2018 2019 2020
117
Exits by Foodtech Companies ($m, #), 2015-2020
166 4 166 76 20
4 4
2
8
3
4
2015 2016 2017 2018 2019 2020
13 4
$M
# of deals
399 Active Foodtech Companies
30 Acquired/Merged
Newly Established Foodtech Companies
47 46 42
45 38 10
2015 2016 2017 2018 2019 2020*
*2020 details are not final
91 229 128 218 145 164
503 335 406
700
131 371
532
1285
642
1272
1625 913
434
907
688
1535
652
1114
2015 2016 2017 2018 2019 2020
Israeli Venture Capital Funds Activity
$15,020m raised by 265 Israeli VCs
Fund Raising by Israeli VCs by Vintage Year and Size ($m), 2015-2020
Medium Fund (100m-200m USD)
Large Fund (200m+ USD) Micro Fund (<50m USD)
Small Fund (50m-100m USD)
