Israeli high tech companies raise $600m in venture capital in Q3 2008

The figure represents a 45 per cent increase compared to Q3 2007, in which $414m was raised, and a 29 per cent increase compared to Q2 2008, in which $465m was raised.

Efrat Zakai, director of research at IVC, said, 'Q3 capital raising reached a record eight-year high, exceeding all projections for the quarter. We don't expect the same rate of investment in the coming quarters. However, 2008 will be logged as a record year, even if the fourth quarter comes in considerably below average.'

Israeli high-tech companies raised $1.68 billion in the three first quarters of 2008, 34 per cent above the $1.25bn raised in the corresponding period of 2007.

The communications sector led capital raising in Q3 2008 with $134m (22 per cent of capital raised) followed by the internet sector with $126m (21 per cent of capital raised) - the highest internet share since Q4 2000. In the first three quarters of 2008, internet companies attracted $247m (15 per cent of total capital raised), which compares with $181m (14 per cent) in the first three quarters of 2007, $65m or (six per cent) in Q1-Q3 2006 and only $21m (2 per cent) in Q1-Q3 2005.

The IVC's Survey reviews capital raised by private Israeli high-tech companies from Israeli venture capital funds and other investors. It is based on reports from 72 venture investors, of which 46 are Israeli management companies and 26 are other, mostly foreign, investment entities.

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