from the February 2011 issue

Israeli start-ups raised $11.1b VC in past decade

PricewaterhouseCooper Israel MoneyTree Report 2001-2010: start-ups in Israel raised $884 million in 2010.

Israeli start-ups raised $11.1 billion in venture capital over the past decade according to the Israel MoneyTree Report for 2001-2010 by PricewaterhouseCooper Israel. Over the same period PwC reported that US start-ups raised $247 billion.

PwC Israel reported that Israeli start-ups raised $884 million in venture capital in 2010, up 20% from 2009 but down 37% from 2008.

Per capita venture capital investment in Israel is among the highest in the world. PwC said, "The report highlights the contribution of the money flowing into Israel from the US and domestic venture capital industry and reflects the strength of Israeli high tech.

The report found a sharp fall in the number of funds active in Israel over the past decade while pointing out that the proportion of investments by foreign venture capital funds has grown. The figures also show that growing investment by Israeli venture capital funds in foreign companies over the decade. PwC Israel said that this is a worrying trend because it showed that Israeli funds cannot find enough investment opportunities in Israel.

Investments in start-ups fell over the decade compared with investments in later stage high tech companies. According to PwC Israel the desired weight of investment to ensure the growth of new companies is 20%-30% of a fund's total devoted to first-time investments.

PwC Israel high-tech practice partner Robi Suliman said, "The past decade was a crazy rollercoaster ride for the various high tech players. From the burst bubble at the beginning to credit crisis towards the end, Israeli high tech know-how had breathtaking ups and downs."

GM investment arm invests in start-up Powermat
The investment arm of General Motors has made its first investment in Israel. General Motors Ventures has invested $5 million in start-up company Powermat, which has developed a mat on which up to three electronic devices can be charged simultaneously, and wirelessly.

The capital raised by the company will help it to accelerate its technological development and to broaden its activity worldwide. According to IVC data, Powermat has raised $25 million to date, including the current round. Other investors in the company are Richards Stone and Ron Ferber. Powermat employs 60 people at its development center in Neve Ilan and in Detroit. Ran Poliakine, its CEO, founded Powermat in 2007. According to Poliakine, the company's technology provides "power transmission that is safe, efficient, and that does not waste energy."

Powermat first exhibited its product in January 2009, at CES. At the beginning of 2010, Poliakine said that in 2009 the company sold about 750 thousand units in the US. It expected to reach sales of 5 million units in 30,000 stores by the end of 2010.

Powermat and General Motors announced at CES 2010, which officially opens today in Las Vegas, that they had signed a commercial agreement that would enable charging of personal electronic devices wirelessly in future General Motors vehicles, starting in 2012. The first car to feature the Israeli start-up's product will be the electrically powered Volt.

Gil Golan, director of General Motors' Advanced Technical Center Israel, who also heads General Motors Ventures in Israel, said, "The company believes in Israel as a center of technological innovation, and it is no coincidence that Israel was chosen along with the Silicon Valley center to lead the activity of General Motors Ventures." He said he estimated that a substantial share of the fund's activity would be directed towards investment in Israeli technology companies. "We are examining several additional companies, and I believe that some of them will mature to investment in the coming months," he added.

Reprinted from the Israel High-Tech & Investment Report February 2011

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