info2014 - ivc - koby simana
TRANSCRIPT
An IVC Bird’s Eye View
Teldan Conference – 12 May, 2014
IVC Research Center
Data
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(Most Active Funds,
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China-Israel Business Directory
NEW
Government
Foreign
Corporations Entrepreneurs
Service
Providers
Investors
High-Tech
Companies Investments,
Acquisitions,
Cooperation
Capital,
Expertise R&D Grants,
Incubators
5889
Active Israeli
high-tech companies
282
Active foreign R&D centers
High-Tech
Companies
Foreign
Corporations
308
Active Israel-related
companies
High-Tech
Companies
Foreign
Corporations
9%
19%
26% 19%
18%
7% 2%
Cleantech Communications Internet IT & Enterprise Software
Life Sciences Miscellaneous Technologies Semiconductors *By number of companies
5%
18%
9%
29%
16%
8%
15%
ICT Companies
<60%
High-Tech
Companies
1270
2023 2144
451
0
500
1000
1500
2000
2500
Seed R&D Initial Revenues Revenue Growth
22%
34%
36%
8%
• 731 new startups per
year on average
• 3:1 ratio in favor of
new startups
• The net number of
companies thus
increases at a ~10%
rate
• By the end of 2014
there will be over
6200 companies
578 551
596
721
639
716 716
835
988 977
226 237 231
270 280
345 362
397 394
347
352
314
365
451
359 371 354
438
594
630
0
200
400
600
800
1000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
New Companies Closed Companies Net
Israeli high-tech & foreign R&D
Branches by regions
17%
22%
50%
7% 4%
North
Central
Greater Tel Aviv Area
Greater Jerusalem Area
South
4426 branches are
located between
Hadera & Gedera:
Nearly 3 in 4
companies
Characteristics and trends
North America 1197
Europe 688
Asia 348
Australia & Pacific 60
South America 58
Central America 28
Africa 21
No, Money is NOT a dirty word
So
If funding sources
are not public,
where does the
money come from?
4500
4700
4900
5100
5300
5500
5700
5900
# of companies
Only 3% of companies are publicly traded
Public
Private
• Less than ½ of companies
are backed by
professional investors
• The rest are
bootstrapped, or backed
by private sources - FFFs 57%
43%
Non-Backed
Venture Backed
• The industry
generates over $2
billion in annual
funding
• Roughly 10% of
high-tech
companies manage
to raise capital
each year
1,465
1,337
1,622
1,759
2,072
1,122
1,250
2,135
1,944
2,296 2,400
428
378 402
462 483
447
388
547
576
662 640
0
100
200
300
400
500
600
700
-
500
1,000
1,500
2,000
2,500
3,000
2004
2005
2006
2007 2008 2009
2010 2011
2012 2013 2014E
Amount raised ($M) Number of Deals
• Foreign investment continues to increase
• There are more investors in the market than before
• And even the Israeli VC funding is mostly sourced abroad
1.5
1.3
1.6
1.8
2.1
1.1
1.3
2.1
1.9
2.3
45% 49% 40% 39% 38% 37% 37% 30% 27% 24%
55%
51%
60%
61%
62%
63%
63%
70%
73%
76%
0%
20%
40%
60%
80%
100%
120%
0.0
0.5
1.0
1.5
2.0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Israeli VC funds Foreign & Others
• On average,
only 1 in 55
companies
reaches an
Exit
• In most
cases, an
Exit results in
the company
being
acquired
2,474
3,638
10,749
4,329
2,696 2,597 2,462
5,190
9,668
6,982
76
97
116 114
86 80 82
100
84 85
0
20
40
60
80
100
120
0
2000
4000
6000
8000
10000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Exits (M&As + IPOs) 2004-2013
Deal Amount ($m) Companies #
• Deals above
$1B are few
and far
between
• They don’t
even bring
most of the
money
• The lower end
exits are the
vast majority
515 716 1,444
3,642 4,705
21,693
5,816
12,254
403
103 110
117
68
107
8 4
0
50
100
150
200
250
300
350
400
450
0
5000
10000
15000
20000
25000
Exits 2004-2013 by Deal Size
Amount $m # of Deals
• Even without
the 4 unicorns
the average
exit is on the
rise
• The change is
mostly a result
in the drop in
lower-end
exits
32.6
37.5
41.2 38.0
31.4 32.5 30.0
51.9 56.2
68.9
25.9
33.1
52.7 54.3
41.7
47.6
41.9
62.4
73.5
87.8
0.0
20.0
40.0
60.0
80.0
100.0
120.0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Avera
ge E
xit $
M
Average Exit Average VC-backed Exit
* Average calculated excluding 4 deals over $1 billion
• Again, even with
Unicorns out
and lower-end
deals in, the
average returns
are positive
• The good news
for VCs is that
their returns are
mostly rising
1.9
2.5
3.0
2.2 2.3
2.5
1.8
4.0
3.6 3.5
1.2 1.2
2.3
1.6
1.9
1.7
1.5
2.8 2.9
3.5
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Average Return on Equity Ratio 2004-2013
Total average ratio VC-backed average ratio
* Average calculated excluding 4 deals over $1 billion
Koby Simana, CEO, [email protected]