In the first three quarters of 2023, the investment in Israeli startups dropped to only 319 deals, with a total value of $5.4 billion. That might sound like a lot, but it's actually a big decrease compared to last year. In 2022, there were 694 deals worth $15.7 billion! Experts think that this decline will continue for the rest of the year because of some recent events, like the Al-Aqsa Flood operation and the war in the Gaza Strip.
Unicorns in Decline
Some startups become so successful that they're worth over a billion dollars. These special companies are called "unicorns." But, in 2023, there were only 3 unicorn companies in Israel, compared to 18 in 2022 and 35 in 2021. That's a big drop! This information was shared at a conference called "Trends and Expectations" in Israel, and it was reported by the Jerusalem Post newspaper.
Less Money Raised
Overall, the amount of money raised for startups in Israel has gone down by a whopping 69% in the first three quarters of 2023 compared to last year. In 2022, there were 51 funds that raised $4.5 billion, but this year, only 10 new funds managed to raise $1.4 billion. That's a big difference!
Quarterly Data
Let's break it down even further. In the first quarter of 2023, the funds raised $500 million, which is a lot less than the $2 billion raised in the same quarter of 2022. In the second quarter, they raised $400 million, compared to $1.3 billion last year. And in the third quarter, they raised $500 million, down from $700 million in the previous year.
Technology Sector Affected
Now, let's talk about the high-tech sector in Israel. In the last quarter of 2023, Israeli startups in this sector raised $1.5 billion. That might sound like a lot, but it's actually a 15% decrease from the previous quarter. In fact, it's the lowest level in 5 years! This decline is believed to be because of the war happening in Gaza, which has affected the high-tech sector in Israel.
Foreign Investors and Other Factors
Foreign investors, which means people from other countries who want to invest in Israeli startups, were also scared away. One reason is because Israel had plans to change its judicial system, which made them worried. However, those plans have been put on hold for now. On top of that, the war and some economic problems also contributed to the decrease in funding for startups.
Investment in Israeli startups has fallen by 65% in 2023. This means that less money is being given to these new companies to help them grow. It's a big change from previous years, and there are a few reasons for this decline.
Source: Agencies
