Israeli venture capital sees weak first quarter

Venture investing in Israel turned in a weak first quarter with a continued shift toward later-stage deal making.

Israeli tech startups raised $1.03 billion in Q1, a decline of 4 percent in dollars from the fourth quarter, according to a report from IVC Research Center and ZAG-S&W. The number of deals fell 6 percent to 155.

Fifty-six percent of the capital came from venture capitalists, marking the lowest point in venture participation since 2015 and the lowest number of VC-backed rounds since 2010. The survey monitors activity from corporate and other investors, including incubators, as well as VCs.

Deal volume in seed and Series A rounds dropped sharply, but dollars allocated fell a less steep 8 percent from the fourth quarter. The volume of later rounds, including Series B and C rounds, rose 20 percent as both foreign and domestic investors shifted capital to more mature companies.

The average financing was largely unchanged at $6.6 million.

Israeli VCs invested $162 million, or 16 percent of total, an increase, as the majority of capital continued to come from abroad.

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