With 2022 half done, there’s a number of new reports slicing and dicing funding data for Israeli startups in H1 2022. In the big picture, it’s needless to say that the market is going through a challenging economic period, but despite tech layoffs and a decline investments in Q2 2022 (as was seen in the US) the Israeli tech industry faired well.
IVC/Leumi Tech Israel tech review Q2 2022
A new report by IVC and Leumi Bank shows that in the first half of 2022, Israeli high-tech companies raised $9.8 billion in 395 deals. While it’s a 30% decline compared to H1 2021 (which reached a record of $26.6 billion in total for the year), it’s highly successful in context.
Early stage (Pre-seed, Seed and Series A) continued to perform well in the first half of the year. The median investment round increased to $5.6 million, which perhaps signals investors appetite towards seed/series A, compared to large growth grounds, which were down significantly. Mega deals of over $100M dropped by 70% compared to Q4 2021.
In Q2 2022, $4.12 billion were raised in 182 deals. The numbers for H1 are impressive but still show clear signs of a slowdown in specific parts of the Israeli tech economy.
Viola Report – H1 2022 Summary
Viola published their own H1-2022 Israel tech ecosystem report (you can download it as a PDF here).
Highlights:
- Capital raised in H1-22 reached $9.4B, a 27% drop from H1-21, but still higher than H1-2020
- Mega rounds ($>100M) dropped by 35%
- Expect to see the impact in the early and growth stages in H2
- US investors moving towards earlier rounds
- Early-stage deal count activity is growing
- Cyber security keeps its lead, while DevOps/data infrastructure is on the rise
GameIS Israeli gaming report
As active members of GameIS, Israel’s Game Developers Association, and investors in Israeli gaming, we (Remagine Ventures) were delighted to support the industry report on the local gaming ecosystem. With today’s news on the merger between Unity and Ironsource (valuing the latter at $4.4 billion), Israel is incredibly well positioned to be a leader in gaming tech and infrastructure.
The GameIS and Deloitte report shows that the gaming industry in Israel is a flourishing market with a great deal of potential. Some of the highlights:
- ? Israeli gaming startups reached over $8.6 billion in revenue in 2021, 5% of global industry revenues in 2021 ($175 billion)
- ? Israel is home to some 190 gaming companies with around 14,000 employees
- ? Israel is an international leader in the casual gaming market, the performance marketing industry and in advanced monetization techniques
Read a summary of the report on CTech by Calcalist or download the report.
What’s next for Israeli tech?
The writing was on the wall for this market correction, as I pointed out in my post from January 2022: (2021 was a record year for Israeli tech – what now?). Companies that manage to survive this period might reap the benefits in an active M&A market, startups might be able to afford to attract top talent again and VCs will have to adjust to responsible growth based on unit economics vs. at all cost. Overall, I’m very optimistic about the future of Israeli tech.
I’m a former general partner at google ventures, head of Google for Entrepreneurs in Europe and founding head of Campus London, Google’s first physical hub for startups.
I’m also the founder of Techbikers, a non-profit bringing together the startup ecosystem on cycling challenges in support of Room to Read. Since inception in 2012 we’ve built 11 schools and 50 libraries in the developing world.