Israeli high-tech companies received just $453 million in venture capital investments in the second quarter of this year. According to IVC Venture Capital AG and the Israeli office of KPMG, the amount raised in the April-June period was 20 percent lower than the year-earlier quarter.
Investments in the first half of 2012 reached $936 million, a decrease of 11 percent from that in 2011 and a decrease in 6 percent from this year's first quarter.
"The percentage of high-tech investment from Israeli venture capital firms is continuing to decline as capital available for new investments is shrinking," said Koby Simana, CEO of IVC Research Center. "In light of their ongoing difficulties in raising new funds, we expect a further decline in VC high-tech investments throughout this year."
First investments by Israeli VC funds in this quarter mark the lowest quarterly share in 10 years, accounting for 18 percent of total investments, Reuters reported.
"The semiconductor sector has retrenched dramatically, both in terms of dollars invested and the number of deals made," said Ofer Sela, a partner in KPMG's technology group. "It dropped to a record low of 5 percent of the total amount invested in the first half of 2012. Historically, this sector has produced significant returns for Israel's economy and local VCs."
Danielle Chazen is a regular contributor to Jspace's technology division. Danielle is a freelance reporter and technology event coordinator with a degree in journalism from the University of Maryland.