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Israeli venture capital funds themselves also continue to raise increased
amounts ofmoney. If current projections for 2016 hold, theywill havemaintained
fundraising amounts of at least US$1 billion for three consecutive years.
Looking more broadly as well, the average deal size is projected to rise overall in 2016,
although the number of exits is projected to be lower than in both 2015 and 2014.
The sum of all first half exit proceeds in the first half of 2016, additionally, was higher
than the average sum of first half exit proceeds between 2011 and 2015. It is also
significant that Israeli companies have been appropriately cautious before entering
public markets, mirroring similar global trends; only one Israeli high-tech company
went public in the first half of 2016.
As companies have become more disciplined in their decision-making, investors
have more consistently been willing to invest at higher valuations. In 2012, 16% of
investments in Israeli high-tech companies were down-rounds, while 66% were up-
rounds. By the first half of 2016, however, Israeli high-tech companies raised money in
down-rounds only 7% of the time, as opposed to up-rounds 90% of the time.
A widening variety of investors is also increasingly putting money and resources into
the Israeli market. For example, in 2009, only 20 Israeli accelerators were operative,
while by 2014, 181 Israeli accelerators were operative, with an additional 54
accelerators added in 2015. Corporate VCs also continue to increasingly place their
strategic funds in Israel: In 2010, corporate VCs placed 42 first investments in Israel,
with the number more than doubling to 85 in 2015. Israeli VC funds may have returned
as well; as first investments by Israeli VC funds, rose in 2015 to 36%, the second-
highest percentage since before the financial crisis.
Particularly conspicuous in recent years, however, has been the entry of Chinese
investors into Israel. Nine Chinese-based investors invested in Israeli high-tech in 2012.
That number rose in 2013 and yet again in 2014, when a total of 22 Chinese-based
financiers invested almost three times the amounts invested by Chinese investors
in 2012. The Chinese penchant for Israeli high-tech has extended further, as high-
profile Chinese investors have also become anchor investors of some of Israel's most
prominent VC funds. Additionally, Russian venture capital investment firms have shown
a rapidly increased willingness to devote funding to Israeli high-tech companies.
Israeli venture capital funds themselves also continue to raise increased amounts
of money. If current projections for 2016 hold, they will have maintained fundraising
amounts of at least US$1 billion for three consecutive years.
Investors have also been investing in surer ways and putting their money on surer
ground. In 2006 late-stage funding represented just 10% of all proceeds from
investment rounds, with the share rising to 20% in 2011, reaching a high of 31% in
2014 and settling at 23% in 2015. At the same time, seed stage funding has returned
to levels seen prior to the financial crisis. The funds invested in 2006 in seed-stage
financings represented 16% of all funds invested in Israeli start-ups. They dramatically
decreased to represent just 4% of all investment proceeds in 2010, but rose again
over time to reach 12% of transaction proceeds in 2015.
In accordance with these market trends, Israeli lawmakers are making it easier and
more worthwhile for professional and semi-professional investors to put their money
in Israel. For example, in December 2015, the Securities Law 1968 and the Joint