from the May 2017 issue

Q1 private equity investment in Israel totals $316m

Investment was up 21.5% from the first quarter of 2016 but down 45.3% from the preceding quarter, IVC-Shibolet reports.

Private equity funds made 24 deals totaling $316 million in Israel in the first quarter of 2017, according to data published today by the IVC Research Center and the Shibolet & Co. law firm.

The figures show that the amount invested was 45.3% less than in the preceding quarter, but 21.5% more than in the corresponding quarter last year. The number of deals was 33% more than in the fourth quarter of 2016 and 26% more than in the first quarter of 2016.

Record private equity investment in Israel in 2016
IVC and Shibolet said that there were no private equity deals of more than $50 million in the first quarter, after two years in which there was at least one such deal in each quarter. The largest deal was a buyout of Ace Auto Depot Ltd. (TASE:ACDP) by the Kedma Capital fund, followed by AMI Opportunities with the buyout of 83% of the controlling interest in Ten Petroleum Company Ltd. (TASE: TNPT.B1).

$1.2 billion available for investment
The Israeli funds accounted for 72% of the investments in the quarter, while investments by foreign funds plunged to $89 million, compared with $150 million in the corresponding quarter last year. The amount invested by foreign funds was their second smallest total since the third quarter of 2015. The number of deals was up, but the amounts invested were smaller.

According to IVC's figures, there are 39 active Israeli private equity management companies managing $12.1 billion in aggregate capital. In 2017, one Israeli private equity fund has raised money to date - the Sky Private Equity III fund raised $200 million; while four more funds are in the process of raising capital.

YL Ventures raises $75m third Israel VC fund in SaaS startups, the second fund in cyber security while the third fund will invest in other tech fields.

YL Ventures has raised a $75 million third venture capital fund, according to a filing with the US Securities and Exchange Commission (SEC). The venture capital firm, founded by Yoav Leitersdorf, manages $60 million in its previous two funds ($32 million and $28 milion). Both funds focus on seed funding - $2-3 million per investment on average - in Israeli startup companies.

The first fund specialized in SaaS startups, the second fund seeks cyber security ventures and the third fund will also invest in cyber security as well as other tech fields to provide diversity for YL.

The newly raised YLV III received commitments from 45 LPs, the filing said. YL Ventures is incorporated in the Cayman Islands and has offices in California to help portfolio companies reach the US market, while investment operations are based in Tel Aviv.

Portfolio companies include vehicle cyber security developer Karamba Security, and cloud security solutions company Twistlock. The company has enjoyed exits such as Proofpoint's $55 million acquisition of cloud security company Firelayers last October and CA Technologies $100 million of acquisition of app performance testing company Blazemeter last September.

Reprinted from the Israel High-Tech & Investment Report May 2017

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