Startups in Israel Break Funding Records and Raise $10.5 Billion in Only Six Months
2 min read
In recent news, the innovation technology sector of the State of Israel smashed an additional capital funding record in the previous week. It has also managed to raise a total figure of $10.5 billion, ever since the beginning of the year. This number is the same as the figure for total funding raised in the year 2020.
The report of this is the second most important highlight in this year as the cash flow continues to sizzle for startups in the Jewish state. The investments for blue-and-white companies have been booming for the past couple of weeks.
The General Partner employed at Grove Ventures, Lior Handelsman, talked about this recent inflow of cash into Israeli startups as well. According to him, the market is ‘red hot’ at this point in time and numerous investments are being made into companies in their early and late stages. However, not all of the valuations make much sense.
He went on to urge companies to effectively use their cash and find a balance between gaining a competitive edge and the drive to progress. He added that some of these funds should be saved for rainy days as well.
Recently, funding has been flowing steadily into local startups in the country, especially enterprise, fintech, and cybersecurity sectors. Companies in these sectors have managed to haul in a total of $6.2 billion, which makes 60% of total investments.
In addition, there is a greater demand for solutions in these particular fields, all across the globe. This is mainly because the coronavirus pandemic brought about a rise in digitization when people were confined to their homes.
The managing partner and co-founder at TPY Capital, Dekel Persi, further added that the accelerated growth in fintech, enterprise, and cybersecurity sectors, has mainly been brought about by low-interest rates across the globe. These interest rates are a direct result of the coronavirus pandemic and have created a demand for investments in the tech sector.
As per a recent report, the Jewish state has reported a rise in funding growth by around 137%, in the first five months of the year, as compared to the initial five months of the previous year.
It was also reported that a large chunk of these funds has been flowing in from foreign investors. The performance of investment all over the world currently stands at 89%. Europe reported an increase of no less than 123% for the same time period, whereas the US recorded a rise of 91%. In addition, an increase of 69% has also been witnessed in Asia.
The future CEO of the Research and Policy Institute, Uri Gabai, maintained that the funding raised in 2021 is an indicator that the growth in the previous year was not a short-term boost related to the coronavirus. Rather, he stated that it is a reflector of increasing the trust of investors in the Israeli innovation scene. He also commended the efforts made by the startups in-country to excel despite the challenging situation of the pandemic.
