10/9/2024–|Last update: 10/9/202407:50 PM (Makkah Time)
Israeli venture capital funds saw a significant slowdown in the first half of 2024, according to a specialized research report released today.
The report, which was reported by Globes, showed a sharp decline in the funds raised and investor activity, reflecting the continuation of the decline observed last year.
Sharp drop in fundraising
In the first 6 months of 2024, just 10 new funds raised $544 million, compared to 27 funds that raised $1.6 billion in 2023.
Adding to the impact of this slowdown is that 73% of the money raised came from just two large funds, Red Dot Capital Partners and Vintage Growth Fund, which each raised $200 million.
“Due to the ongoing war and instability, we did not expect 2024 to be a normal year. Analysis of investment activity in the first half of the year reflects a difficult period for Israeli venture capital funds,” said Ben Klein, CEO of the think tank.
Israel has been waging a devastating war on the Gaza Strip since October 7, 2023, leaving nearly 136,000 Palestinian martyrs and wounded, most of them children and women.
He added that the report shows that “the total capital raised by Israeli venture capital funds has decreased compared to previous years, but the market is still holding up thanks to the presence of significant capital for investments.”
Decrease in foreign fund activity
The report also noted a significant decline in the activity of Israeli institutional investors. These investors participated in only 13 investment rounds in the first half of 2024, totaling $40 million, a dramatic drop compared to 40 investment rounds totaling $158 million in 2023.
Foreign venture capital funds investing in Israel have been affected. For example, Samsung Next made just three investments in Israeli startups in the first half of 2024, compared to 13 investments in 2023.
The report noted a significant decline in investments in the automotive and deep technology sectors, compared to investments in generative artificial intelligence, financial technology, and cybersecurity.
