Less sharp and much less fund: The decline in high-tech investments continues
The number of transactions has dropped significantly since the beginning of the year, and unicorn companies (companies worth $ 1 billion or more) that would increase value by leaps and bounds have reduced activity.
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Of money
03/07/2022
Sunday, 03 July 2022, 08:58
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The volume of investments in Israeli high-tech fell by 31% compared to the transactions in the second quarter, which amounted to $ 4.5 billion, compared to $ 6.6 billion in the second quarter of 2021, according to the summary report of the second quarter of 2022 prepared by the Greenfield Partners investment fund. It also shows that the number of acquisitions, which stood at 104 transactions in the second quarter of this year, decreased from 132 in the first quarter and 135 in the second quarter of 2021.
Unicorns (unicorns, companies worth $ 1 billion or more) that would increase their value by billions of dollars in capital raising Reduce activity.
Knowing that during this period they will not receive a larger valuation and it seems that a new valuation will be even smaller than the current values.
In the second quarter, only one Unicorn announced a capital raising, StarkWare, compared to the second quarter last year during which they announced a jump in the value of unicorns: Gong - $ 7.2 billion, Next Insurance - $ 4 billion, Porter - $ 3 billion, Trax - $ 2.25 billion.
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Comparing all unicorn transactions, which includes capital raising transactions that have turned companies into new unicorns and existing unicorn transactions.
In the second quarter of the year, 7 transactions of the companies were announced: Monte Carlo, Unit, Perimeter 81, StarkWare, Vayyar, Viz.ai and Optibus.
Reflecting a 50% decline from the 14 capital raisings announced in the second quarter of 2021.
According to Shay Greenfeld, Founding Partner of the Greenfield Fund: "The data for the second quarter of 2022 reflect the continuing trend of declining investment in startups, given the macro environment and declines in public markets. , Or SAFE and the expansion of investment rounds by internal investors. The continuation of the period will presumably lead to additional creative financing solutions. Against the background of the uncertainty in the markets. . "
Additional data emerging from the report are a 50% decrease in the number of growth rounds, comparing capital raising between $ 50 million and $ 100 million, which fell from 26 transactions in the second quarter last year to 13 in the second quarter of this year.
The analysis of activity within the second quarter shows a decrease towards the end of the quarter of 32% in the volume of transactions in June compared with May.
In addition, the number of mergers and acquisitions related to Israeli companies increases, and in each of the months of April and May, 3 transactions were reported, compared with 11 transactions in June.
Examining the distribution of investments from the second quarter by industry, it can be seen that the leading field in investments is digital health with 24% of the volume of recruitments, followed by cyber 17.4%, startups in the data fields, artificial intelligence and machine learning - 12.8%, cloud technology and development companies 10.7%.
Other areas of investment were B2B software, fintech, crypto, consumer products, deep technology and transportation.
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