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The US-Israel Legal Review 2019 89
of $6.47b raised in 2018, representing a growth
of 17% compared to 2017. We have also continued
to see a growth in the number of transactions and
amounts raised in later rounds. The number and
the value of “big” transactions (of over $20M) has
kept on growing with some prominent examples
such as JFrog (who raised $165M), Trax Image
Recognition ($125m), eToro ($100m), Gett ($80m),
Sisense ($80m) and BlueVine ($72m). On the other
hand, the number and value of small transactions
(under $5m) has decreased. This might be a part
of a global trend we have seen in recent years,
in which investors prefer the more mature and
established companies, rather than early-stage
start-ups. It is worth mentioning that the gap
between capital raising amounts in mature and
early stage companies was wider than ever this
year. However, we have seen some recovery in terms
of the number of seed transactions completed this
year, so we will have to wait for 2019’s results to
see whether investments are shifting back to early
stage companies.
Looking at different fields in the Israeli tech
industry – it seems that 2018 was the strongest
year so far for cybersecurity companies. The Israeli
cybersecurity industry has seen bigger numbers in
both terms of transaction and amounts raised. This
comes as no surprise, since Israel is considered
one of the global superpowers in cybersecurity.
The AI and Fintech fields have also seen a growth
in the total amounts raised, while the number of
transactions completed in these fields during the
past year remained steady.
As for the investors themselves, VC funds
continue to be the most prominent investors in
the Israeli tech industry, with 34% of the capital
invested in 2018 (however, it represents a decrease
in the total share of the VC funds). Other key
players are corporates, corporate VCs, investment
companies and private investors. Since 2013, we
have seen a turnover in the source of the funds,
as the capital raised from Israeli investors has
decreased from 52% in 2013 to 42% in 2018, while
the share of foreign investors has increased from
48% in 2013 to 58% in 2018. Most of the capital
raised from foreign investors in 2018 came from
the US, China, the UK and Germany.
Looking at the exits completed in 2018, we can
say that despite the fact that 2017 was a record-
breaking year in the Israeli tech industry in terms
of exits, with the largest exit in Israel’s history – in
which Intel acquired Mobileye for $15.3b, it seems
that 2018 has shown some good results too. Some
prominent exits in 2018 were those of Frutarom
(acquired by IFF for $7.1b), Orbotech (acquired by
KLA Tencor for $3.4b), Sodastream (acquired by
PepsiCo for $3.2b), Imperva (acquired by Thomas
Bravo for $2.1b), Mazor Robotics (acquired by
Medtronic for $1.7b) and Datorama (acquired by
Salesforce for $850m).
AMIR S. ILIESCU
CORPORATE AND M&A PARTNER
Israel is considered a global
superpower in cybersecurity, and
2018 was the strongest year so far
for cybersecurity companies.