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High-Tech & Technology -
DUN’S
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2016/17
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the Cyber and the Fin-Tech fields. Foreign VC
funds raised about $662M and focused their
investments in trading and cyber companies,
as seen from the findings of a report by the
research firm IVC (see chart below).
The authors of the report concluded that the
decline amounted to 41%, compared to 24%
in the previous year, that this trend is a result
of a decline in the activity of foreign funds in
2015, and that Israeli funds make more new
investment every year. It should be noted that
450 Cyber companies were sold in the past
year, and the total extent of exits in 2016 was
about $2.2B, in comparison with about $3B
in 2015.
The potential foreign investors who stood out
this year were the Chinese, who invested hun-
dreds of millions of dollars in the Israeli high-
tech industry. This is in contrast to previous
years, when the main investors were European
and American. According to IVC, since 2012,
30 new Chinese investors entered Israel, and
invested in more than 80 Israeli companies,
apparently as a result of the economic poten-
tial the Chinese see in the state of Israel. IVC’s
research further shows, that the selection of
foreign investors in Israel as an investment
target may be attributed to the fact that 91%
of the investors in Israel are local.
Along with the success in the industry came
also a decline between the months of Septem-
ber and November. In these months, accord-
ing to the Central Bureau of Statistics, there
was a decline of 15.5% in the export of High-
Tech and Pharmaceutical products, whereas
the electronic components segment showed
a 71.3% decline in exports. There was also a
sharp decline in the import of machinery and
equipment.
2016 was a more successful year for the high-
tech industry from the perspectives of exits,
which showed a slight increase compared to
2015, and the increases in salary and in work-
ers in the industry.
Recently, the Minister of Finance also promoted
an initiative aimed at creating a new directors
program which would support the entry of tech
executives to government-owned companies.
The process is based on the selection of candi-
dates who meet the required criteria, were se-
lected from a candidate database and received
points and experience in many areas, with the
main one being economic-managerial. In ac-
cordance with the initiative, about 80 posi-
tions in government-owned companies would
be allocated to the high-tech industry.
The initiative received a lot of positive feed-
back, especially from the Government Com-
panies Authority, that supports the initiative
which is expected to change the nepotistic
system and bring into it tech executives who
would be able to contribute their education
and skills for growing these companies.
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Japan
South Korea
India
China
Italy
Israel
Spain
Germany
France
Total
Australia
Austria
United
States
England
Canada
Denmark
Finland
Sweden
Belgium
Holand
Switzerland
Domestic Inventor Share
Foreign Inventor Share
Source: WIPD Database, March 2013
An Increase in Capital Raisings made by both Foreign VC Funds and Investors
25.5 52.9 59.9 62.9 65.6 67.0 70.9 72.8 72.9 75.3 78.5 80.5 81.6 83.9 90.2 90.9 93.9 95.7 96.1 96.4 96.4
The High-Tech Industry – Sector Review for 2016
(Continues)