Venture Capital-backed exit deals in 2015 brought in a total of $4.98 billion – the highest in 10 years, according to the new IVC-Meitar Israeli High-Tech Exits Report 2015. Last year’s 52 deal haul even surpassed 2013’s $4.04 billion, which included Waze’s $1.03 billion acquisition by Google.
“The increase in the size of the average VC-backed exit has a lot to do with the patience and perseverance with which VC funds have been managing their Israeli portfolios lately. The VCs, many of whom have been successfully raising new funds in the past two years, have enough breathing room to patiently wait for portfolio companies to realize their full potential,” said Koby Simana, CEO of IVC Research Center.
He added, “One of the things our analysis revealed was that the average time to exit in VC-backed deals keeps climbing, reaching 9.5 years in 2015 – narrowly within the VC model timeline. The funds’ willingness to sit and wait for a portfolio company to mature enough for a substantial exit, seems to pay off, as the average deal and return on equity are climbing as well.”
The size of the average VC-backed deal reached nearly $96 million, 47 percent above the 10-year average and second only to the record set in 2013 – of $106 million.
Overall, Israeli startups recorded a red hot year in 2015. According to the new report, mergers and acquisitions (M&A) deals below $1 billion were also at their strongest in 10 years – culminating with $7.2 billion.
“The growth figures disclose, among other things, companies’ readiness to be sold after they exhaust their growth opportunities. Companies are still being acquired for their human resources and technology assets, however in more and more cases the companies have a real ability to penetrate markets and establish an impressive business – a fact which is translated into higher valuations,” said Alon Sahar, Partner in law firm Meitar Liquornik Geva Leshem Tal.
[Photo: Nati Shohat / Flash90 ]