The volume of hi-tech investments in Israel decreased in 2022 by 42% compared to 2021 and amounted to $14.95 billion, according to a report on the state of tech by IVC and LeumiTech, the hi-tech banking arm of Bank Leumi.
There were 663 investment rounds, the second largest volume of investments since 2015, which is similar in scope to 2018-2019.
The report also shows that in 2022, there were 120 buyouts. The fourth quarter of 2022 continued the downward trend of the first three quarters of the year, with investments of $2 billion in 121 rounds. The 101 merger and acquisition transactions in 2022 amounted to 12.7 billion dollars.
IVC estimates that 709 companies were established in the past year, of which 23 are unicorns, companies traded at a value exceeding one billion dollars. Timor Arbel-Sadras, the CEO of LeumiTech, stated that for Israeli hi-tech to return to a successful upward trend, a change of direction is required.
What does the data show?
The data shows that the number of acquisitions in 2022 was the lowest since 2014. Also, there was a sharp decrease in the amount invested in series A rounds, the first significant round of venture capital financing.
Arbel-Sadras added that in the second half of 2023, there will be numerous mergers and acquisitions by tech companies in advanced stages and private equity funds. It's important to cautiously look at the future and make responsible strategic decisions at appropriate times.
Guy Holtzman, co-founder and CEO of IVC added that in 2023, a balance will be found again between investors and companies, a process which will have unpleasant side effects, and the next year will be difficult for many startups. IVC data forecasts that there'll be renewed growth in the second half of 2023.