Israeli deals earned tech investors $50 billion in a decade

Israeli deals earned tech investors $50 billion in a decade

A new dashboard by IVC gives investors the full picture of where the money is in Israel's tech industries

Screenshot of the IVC Dashboard, listing Israeli exits in recent years (Photo credit: Courtesy)
Screenshot of the IVC Dashboard, listing Israeli exits in recent years (Photo credit: Courtesy)

There are many facets to the story of Israeli high-tech success – and for investors, the facet they’re most interested in is the bottom line. Now, there’s a web site that puts the numbers behind Israeli tech into perspective; the IVC (Israel Venture Capital) Research Center, working with big data analytics company SiSense, has designed an analytics dashboard that lets investors check out just where the money is in the Israeli tech story. And according to the dashboard, deals for Israeli tech companies between 2004 and 2013 were worth more than $50 billion.

The dashboard lets users check out the total number of exits – both mergers and acquisitions, and IPOs – by year and by industry (sector). The dashboard also lists deals by size (less than $5 million, between $10 million and $20 million, etc.), the average amount for an exit deal in a specific year, the average time to exit by sector, along with total capital raised by companies and total money made in exits by year.

The dashboard covers the years 2004-2014, and will be constantly updated, said IVC (there has already been one Israeli exit in 2014, an M&A deal worth $15 million), and yields a great deal of interesting information. Between 2004 and 2013, the dashboard shows, there were 910 deals – 803 M&As, and 107 IPOs. The total value of all exits over the past decade was $50,403,000,000. The largest number of exits (394) have been for less than $5 million, while three exits were worth a billion dollars or more. 2006 was the best year during the period for exits, while 2013’s deals were worth about a third less than 2012’s, the second best year during the period.

Based on the dashboard, IVC has also produced a report covering 2013, which shows that M&A deals during the year were worth $6.3 billion, with the average deal $87 million. Eight companies raised $361 million in IPOs during 2013, with communications leading the way in overall exits, followed closely by life sciences. And, for the first time in ten years, an Israeli company, Baylin Technologies, went public on the Toronto Stock Exchange.

IVC is a private company that produces research reports on Israeli firms in the areas of information technology, life sciences, cleantech, communications, and more. The group also produces a yearbook with data on Israeli tech companies, as well as an annual event where investors can meet the people behind the technology. Most of IVC’s services are for subscribers only, but the new analytics dashboard is available to anyone.

While Israelis are naturally proud of big deals like the purchase of Waze or Given Imaging respectively by Google and Covidien, the dashboard is a good tool for a “reality check,” giving a good sense of the strengths – and weaknesses – of the Israeli tech economy, said Koby Simana, CEO of IVC Research Center. “Between 2004 and 2010, the average exit deal remained consistently in the $30 million to $40 million range. A breakout in 2011 saw the average deal size jump to $52.3 million, and it continued to rise to $83 million in 2013.

“According to our analysis, the number of exits above $100 million did not increase, despite common misconception, nor did higher deal valuations have a major impact on average deal size,” Simana said. “Higher average deal size mainly reflected a dramatic decline in the number of small deals below $10 million. Deals like the Waze or Given Imaging acquisitions are still few and far between, and that’s unlikely to change anytime soon.”

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