The increase in investments stemmed from the rise in the amount
raised by Israeli venture capital funds themselves. Zinook estimates
that they raised some $2.5 billion in 2000, compared to $1.6 billion
in 1999. Over the last decade, Israeli venture capital funds have
raised a total of $6.5 billion, some $3 billion of which is still
available for new investments, according to Zinook.
Zinook's CEO, Zeev Holtzman, estimates that since follow-up
investments represent nearly half of the total amount managed by the
funds, leaving $1.5 billion is available for first-time investments
in new startups.
In 2001 he expects a slowdown both in venture capital investments
and in raising new money for venture capital funds. He also believes
that amounts raised by the companies themselves will also drop since
a large part of the venture capital funds' activities will focus on
follow-up investments for existing portfolio companies, not on new
companies.
Israeli startups raised more than $3.2 billion from venture capital
funds in 2000 - three times the amount invested in 1999. According to
the Zinook group in the last quarter of 2000 Israeli startups will
have raised more than $800 million. The figure was reached
notwithstanding the sharp drop in Nasdaq, the drought in the Initial
Public Offerings market and the security situation in the country.
It also represents a decrease of less than 20 percent from the
preceding quarter, when investments in Israeli startups exceeded $1
billion.