JERUSALEM (Reuters) - Israeli high-tech companies raised a record $3.4 billion in 2014 from venture capital and other private investors, led by the Internet sector, the Israel Venture Capital (IVC) Research Center said on Wednesday.
Last year’s total, in which 688 companies raised private funds, was 46 percent higher than $2.3 billion in 2013, IVC, in cooperation with the Israeli office of consultancy KPMG, said in a report.
Israel’s high-tech sector is among the world’s largest and is a major growth driver, accounting for around 12.5 percent of economic output, 8 percent of the country’s jobs and more than 50 percent of industrial exports.
The industry is an investment magnet, attracting hundreds of multinationals like Apple, Intel and Google, who have been eager to snap up local start-ups and set up R&D centers.
In the fourth quarter, high-tech companies raised $1.1 billion, the most in one quarter since 1999, up 39 percent from a year earlier. Over the past decade, the quarterly average was $470 million.
“The hike in capital raised by Israeli high-tech companies directly reflects the continuing increase in the number of large deals,” said Koby Simana, chief executive of the IVC Research Center, noting that capital raised in large deals more than doubled in 2014 to over $1.3 billion.
Ofer Sela, a partner at KPMG’s technology group, noted that in 2014, 39 companies completed financing rounds of more than $20 million.
“We believe that the maturity level of Israel-based companies in 2015 will attract private equity investors, resulting in even higher amounts raised per revenue-growth company,” he said.
During 2014, Internet companies led capital raising at 28 percent, followed by the life sciences and software.
Reporting by Steven Scheer; editing by Keith Weir