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Chart 1.2: Capital Raised by Israeli High-Tech Companies by Sector 2005-2014
Israeli High-Tech Startups: Opened vs. Ceased
High-tech company formations increased 5 percent to 1,000 in 2014. The Internet
sector saw heightened activity with 368 company formations that accounted for 37
percent of total openings. The rise in openings, particularly in the Internet and mobile
application sectors, refects the fact that it is now faster and cheaper to establish new
startups, which have short time-to-market.
After years of a stable ratiobetween new formations and closings,with two companies
newly formed for every company closed, 2014 saw the ratio move to three companies
established for every closing. This indicates that companies today, in sectors such as
the Internet and mobile apps, have more robust business models and can be easily
sustained while receiving less investment.
Chart 2.1: Newly Established vs. Closed Israeli High-Tech Companies 2010-2014
Israeli High-Tech Exits
This section examines mergers and acquisitions (M&As) and initial public oferings (IPOs)
of Israeli high-tech companies, based on the IVC-Meitar Exits Report.
In 2014, 42 VC-backed exits were valued at $3.1 billion, accounting for 45 percent
of the $6.94 billion from 99 exit deals involving Israeli and Israel-related high-tech
companies. The year 2014 was not as strong as 2013 for VC-backed exits despite more
deals taking place, with proceeds 23 percent lower. Proceeds from 2014 exits were 31
percent higher, however, than the 10-year $2.36 billion average.