Not since the bubbly days of the dot com boom that peaked in April
2000 has the Israeli high-technology sector experienced such a high
level of explosive growth.
Israeli startups financed by venture capital racked up $2.5 billion
in exits (buyouts or share issues) in the first half of 2007.
According to figures published by accounting firm Ernst and Young and
research firm VentureOne, this amount was almost as much as the
entire 2006 total. ÊThe value of purchases of Israeli startups for
the first six months of 2007, excluding stock issues, was $1.015
billion, according to figures from IVC-Online. Ernst and Young
estimates that for all of 2007, the total will reach $3.2-3.5
billion. This would be a 25 percent increase over 2006, making it the
best year since 2000.
The future appears to be bright. ÊIn the second quarter of 2007, 118
Israeli high-tech companies raised $436 million from venture
investors - both local and foreign. 121 companies up 7 percent from
$406 million raised the amount in the previous quarter, and 8 percent
ahead of the $404 million raised by 109 companies in the second
quarter of 2006. In the first half of 2007, capital raised was $842
million, up 10 percent from H1 2006 levels.
Moreover, foreign direct investments in 2007 are expected to grow by
8.0%, reaching $15.3 billion, as compared to $14.2 billion in 2006
(2005: $4.8 billion; 2004.
Israeli exports are also having a banner year and should experience
more than $30b. in exports in 2007. There has been a major jump in
defense exports. Defense exports hit an all-time record last year, as
signed contracts for defense industry deals with foreign armies
reached $4.18 billion. Defense exports have also led to civilian
exports. India has purchased several desalination plants while being
major buyers of defense systems.
The conditions that have fueled the growth remain constant.
Government support for infant companies remains intact. Almost any
start-up can qualify for a $200,000 grant. The incubator program
offers support for entrepreneurs who are relieved of many of the
administrative chores. Indications are that venture capital
investments, from Israel and abroad, are plentiful.
Youngsters are flocking to colleges to earn technical degrees.
Demobbed soldiers entering the working place are bringing with them a
high kevel of technological know-how,
Under these conditions it is clear that 2007 will be a record year
and serve as a solid foundation for 2008.