Investment in Israeli startups diminished to 319 deals with a total value of $5.4 billion in the first three quarters of 2023, compared to 694 deals worth $15.7 billion in the same period of 2022, amid expectations of a further decline during the rest of the year against the backdrop of the repercussions of the Al-Aqsa Flood operation and the war. On the Gaza Strip.
The number of startup companies whose value exceeded one billion dollars (unicorns) in 2023 declined to only 3 companies, compared to 18 companies in 2022 and 35 companies in 2021, according to what was highlighted by the “Trends and Expectations” conference, which was held in Israel recently, and some of its proposals were quoted. Jerusalem Post newspaper.
In general, venture capital fundraising in Israel declined by 69% in the first three quarters of 2023 on an annual basis, as 10 new funds raised $1.4 billion, compared to 51 funds that raised $4.5 billion in 2022.
Data for quarters
These are separate quarterly data regarding venture capital raising operations, as follows:
- The funds raised $500 million in the first quarter of 2023, down from $2 billion in the corresponding quarter of 2022.
- The funds raised $400 million in the second quarter, compared with $1.3 billion in the corresponding quarter last year.
- It raised $500 million in the third quarter, compared to $700 million in the third quarter.
Technology sector
In this context, preliminary data showed that Israeli startups in the high-tech sector raised $1.5 billion in the last quarter of 2023, a decrease of 15% from the third quarter, which is the lowest level in 5 years, indicating that the high-tech sector in Israel was affected by The war that Israel is waging in Gaza.
A Reuters report a few days ago, citing the Israeli Venture Capital Research Center and the Lumitech Foundation, stated that fundraising for investment in emerging technology companies decreased in the fourth quarter (until last December 26) by 15% from the third quarter.
According to estimates included in the report, Israeli startups raised about $7 billion in 2023, compared to nearly $16 billion in 2022.
In addition to reduced funding due to the war and economic problems, foreign investors were spooked by Israel’s plan to reform its judicial system, a proposal that has since been shelved.
