The effects of the corona crisis are revealed in two new reports published this morning examining the state of exits and capital raising
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The corona crisis threatened Israeli high-tech in 2020. Many argued that recruitment would stop, exits would be eliminated and the ecosystem would change beyond recognition. Just before we finally say goodbye to 2020, interesting reports are published reviewing the year that has been for Israeli high-tech.
Fewer exits – more issues
According to the PwC report published this morning, fewer exits were recorded in 2020, but those that did manage to reach this target, cut record amounts. Total exits and IPOs in 2020 were $ 15.4 billion, compared to $ 9.9 billion in 2019. PwC reports that this is a record amount that also surpasses 2014, when Mobileye was issued.
The average value of the deal also rose with a record number of $ 257 million. However, one of the most significant reasons for this figure lies in the fact that PwC is simultaneously reporting a 25% decrease in the number of transactions, which now stands at 60 transactions in 2020 compared to 80 transactions in 2019, which of course raises the average amount.
Another record was broken in the IPO segment, with 19 IPOs recorded in 2020 compared to 13 in 2019 with significant IPOs such as those of JFrog, Nanox and Lemonade. The value of the issues skyrocketed to $ 9.2 billion in 2020 compared to $ 2.1 billion in 2019, and the average issue value also climbed to $ 489 million in 2020.
Along with PwC’s report, IVC’s annual report was also released, which presented slightly different data when it reported a sharp drop in mergers and acquisitions totaling $ 7.8 billion in 93 different transactions in 2020, compared to $ 14.24 billion in 143 transactions in 2019. There is a significant methodological difference between the two reports, with that of PwC not including secondary offerings or acquisitions of issued companies.
Yaron Wiesenblit, partner and head of the high-tech department at Pwc, stated that “although the number of transactions has decreased by 25% from 80 to 60, an examination of the transactions with a more accurate resolution only sharpens the recovery and rapid responsiveness of the local high-tech industry… The main story of this year is the return of Israeli high-tech companies to the public domain through their issuance to the public. The summary of 2020 would probably have ended in a completely different way had it not been for the significant increase in the number and value of issues of Israeli technology companies on the US and Israeli stock exchanges.
The recruitments are on the rise
IVC also summarizes the capital raising of the year, and its data shows that in 2020, 579 transactions totaling $ 9.9 billion were completed – an increase of 14% compared to the number of transactions in 2019, and a 27% increase in invested capital. Here, too, there are several factors that have pulled the average up, and according to IVC, these are 7 fundraisers of more than $ 200 million that took place this year, compared to 3 that took place in 2019.
While venture capital funds have invested more this year compared to last year, it seems that investors prefer to focus on existing portfolio companies rather than looking for new adventures. Thus we saw a relative decrease in the amount of investments in Seed and A rounds that stood at $ 1.6 billion, but the trend changed in the advanced quarters of the year. Companies in more advanced stages have raised a record $ 8.33 billion.
The authors of IVC’s report, Shira Ezran, Mike Rimon and Itai Frishman from Meitar, claimed that while in 2020, following the Corona epidemic, there was a significant decrease in the activity of mergers and acquisitions of Israeli companies, there was a significant increase in capital raising by Israeli and foreign investors. Transactions and in the cumulative capital invested.
A good old age
Born with a joystick in hand. He has far too many gadgets and far too little free time to play with them all. An unexplained hammer holder for calibrating device batteries. When he’s not busy writing about technology, he likes to talk about it, and a lot
