38 investments of over $100 million each were responsible for approximately 50% of the total amount raised in the first half of the year, the report said. $50 million or more were invested in 79 deals, compared to 47 such transactions in 2020 and 39 such transactions in 2019.
During the second quarter of 2021, 230 transactions were completed, for a record investment amount of $6.52 billion. The number of transactions completed in the first half of 2021 was equal to 66% of all transactions completed in 2020, the report said.
The majority of capital flowed towards companies in the fintech and cybersecurity verticals. Cybersecurity companies raised $2.9 billion in the first six months of 2021, almost 25% of the total amount raised in this period. In fintech, there were 57 investments, compared to 26 deals in the corresponding period last year.
Meanwhile, a record 48 Israeli companies completed their IPO in the first half of 2021, raising a total of $8.42 billion. Of those, 35 were done on the Tel Aviv Stock Exchange (TASE), accounting for about $1 billion, or 12% of the total. This indicates that TASE has become a valid platform for technology companies of certain valuations to go public, the report noted.
12 companies went public in the US during the first half, through IPO and SPAC mergers, raising an aggregate amount of $7.41 billion, and with an aggregate stock market value of $57.9 billion. Seven SPAC mergers raised a total of $2.41 billion abroad.
Hi-tech M&A deals in the first half of 2021 amounted to about $4 billion, a rate that was similar to 2020. The three big acquisitions were MyHeritage acquired by Francisco Partners for $600 million; Prospera acquired by Valmont and VDOO acquired by JFrog for $300 million per transaction.
"Since 2013-2014, we have not seen such a large number of Israeli high-tech companies go public in such a short period of time," said Mike Rimon, a partner at Meitar. "Companies, especially those that went public in the US, completed their IPO at very high valuations, and most raised their valuation following the IPO. We anticipate this trend to continue in the near future, albeit possibly more moderately than in the first half of 2021. Mergers with SPACs will be considered, among other things, in light of US and Israeli regulators' concerns regarding such transactions, as well as the performance of such companies following their de-SPACs, which were significantly lower than the "traditional" IPOs in the first quarter of 2021."
"The Startup Nation wants to be a scale-up nation. Companies in Israel try to match their counterparts in Silicon Valley.," said Itay Frishman, a partner at Meitar. "All those Unicorn companies, including those that went public, will have to prove they deserve their high valuation. Until recently most Israeli companies were sold or evaluated based on dreams and promises. Today, the Israeli high-tech market is ready for the next phase. The final outcome will be tested in the coming years. The words will remain on paper and the market will focus on revenues and continued accelerated growth. The future will determine if what we see is the real thing."