2. Eran Wagner
Copyright © 2016 IoT Israeli Conference. All rights reserved.

3. Average Financing Series Size
Israeli Tech 2016
H1 2014
H1 2015
H1 2016
Capital Raised
$1.6B in 334 deals
$2.1B in 327 deals
$2.8B in 359 deals
Average Financing Series Size
$4.8M
$6.5M
$7.9M
VC backed deals
$991M in 184 deals
$1.4B in 182 deals
$1.9B in 214 deals
Average VC backed deal
$5.4m
$7.5M
$8.7M
2014
2015
H1 2016
Total Exits proceeds
$7.78B
$8.04B
$3.32B
Average Exit size
$65M
$72M
$74M 3

4. Israel at a Glance 13, 715 Miles ² Jerusalem 4.9% 8,522,000 Capital:
Population
Growth
2.8%
Capital:
Jerusalem
13, 715 Miles ²
4.9%
Current Unemployment Rate
GDP
305.7$
Billion
37,200$
Per capita

5. A Unique Innovation Ecosystem
Over 350 MNC have a local presence
Highest # of engineers per Capita
“Israel is the most promising
Investment hub outside of the U.S.”
1400 start-ups formed in 2015
OECD’s second highest (after South-Korea ) R&D spending as % of GDP (4.3%)
Warren Buffet
(The Tower Magazine)

6. Israeli High-Tech Capital Raising
Israeli high-tech capital raising soars to $4.43B in 2015; 30% above 2014’s previous record
VC-backed deals capture majority of investments in 2015, with $3.2B – up 36% from 2014
Number of large deals of $20M or more - up 62% in 2015

7. Israeli High-Tech Exits 2015
2015 Israeli high-tech exits hit $9.02 billion - up 16% from 2014
VC-backed exits reached $4.98B – highest in 10 years
M&A deals below $1 billion strongest in 10 years – at $7.2 billion

8. A Unique Innovation System
Unique Society
high quality and low cost educational system- among the most educated societies in the world
Highly adaptive, motivated and creative environment- leads many entrepreneurs to establish cutting-edge startups.
Israel is a relatively young state- requires it to be hedge, nimble and disruptive.
Part of the Israeli culture is taking risks- people know that failure is a decent option.
Market
Lack of natural resources that led to scientific-technological innovation system to ensure Israel quality of life
The country’s small size and geographical isolation from its neighbors enhanced domestic dynamics and “Global-First” approach.
Military service
Young people already receive a high technical training during their military services
During the service they get equipped with a high sense of responsibility and success orientation (highest per capita ration of engineers in the world).

9. A Unique Innovation System
Government fostering innovation
R&D Support
The Office of the Chief Scientist at the Ministry of Economics, Trade and Labor provides a variety of support programs on an annual budget of about $400 million. 4.3% of Israel’s GDP accounts for R&D spending.
Investment Support
The Investment Law enables foreign companies to benefit from a company tax rate of only 10%, and investment grants of up to 24%.

10. Office of the Chief Scientist (OCS)
Funding framework
Hundreds of projects funded annually, across the start-up and industrial lifecycles.
Support focuses upon the development of novel products based on new and innovative technologies.
OCS and the Ministry of Economy provide R&D funding under the jurisdiction of The Law for the Encouragement of Industrial Research & Development (1984). 10

11. Supporting Entrepreneurs
Target: Pre-seed and seed companies
Special benefits:
Fixed rate of support: 50%
Perennial approvals
Recognition of commercialization and marketing expenses
Total support for a project: Up to NIS 5M for a period of up to 24 months
Six months for the company to find investors .

12. Tech Incubators
Target: Individual entrepreneurs and start-up companies
Support:
OCS – 85%, Incubator – 15%
Projects of 1 – 2 years, budget frame of up to NIS 3M
Equity:
Entrepreneur: 50% – 70%
Incubator licensee: at least 20%

13. Fortune 500 Capitalizing on Israel
Over 320 MNC R&D Centers, incubators, accelerators, etc. were established in Israel
80+ Fortune Global 500 companies have a research and development centers in Israel.
The companies accelerate business with unique IP and unique technologies that are developed in Israel leveraging a business friendly ecosystem
GF500 companies benefit from the quick, can-do-attitude of Israelis that focuses on breaking down barriers to get new products out-to-market very quickly
Select Companies

14. Israel is attractive for MNCs
Innovation and disruptive technologies Proven success stories Strong Human Capital Onboarding through startup acquisitions
Advanced manufacturing facilities
A Strong and Resilient Economy
Comprehensive governmental incentives

15. Accelerators Corporate NGOs and Associations VCs and Investors
Municipality Hubs
VCs and Investors
Academic Institutes
For Israelis abroad

16. Incubators

17. Israel vs Silicon Valley
$535B
Metropolitan GDP
45%
Foreign Employees
$132B
27%
Founder Age
36.2
118K
Software Engineer Salary
33.6
61K
Startups with at least 1 tech founder
85%
36%
Foreign Costumers
74%
100%
Source : Compass

18. A B C D E+ Israel vs Silicon Valley 23% 25% 20% 44% 28% 12% 14% 18%
11% 5%
Source : Shibolet

19. Israel vs Silicon Valley
Average Seed Round
Rounds With Local Only Investors
Dilution
Average Series A Round
$900K
61%
19%
$7M
Silicon Valley
53%
21%
$700K
$5M
Israel
Source : Compass

20. Expected $1.5 billion when completed
The Israeli Venture Capital Market 18
new venture capital funds closed capital in 2015
$1.02B
Expected $1.5 billion when completed
funds raised by Israeli VCs in 2015 4
$2B
available for investments by Israeli venture capital in 2016
VC funds raised more than $100 million each
166
48% of first investments
51%
Investments made by Israeli funds in 2015
Of Israeli VC funds Investments were in Seed round

21. Capital Raised by Israeli VC Funds

22. Most Active Israeli Funds 2015

23. Most Active Israeli Micro-VC Funds 2015

24. $3.4B $2.0B $841M ↑19% $300M $2.2B The Israeli Private Equity Market
Private equity investments in Israel in 2015
$2.0B
48 deals
Technology sector PE deal-making (58% of the total PE investments in
2015
$841M
↑19%
from 2014
private equity deals in Q4/2015 – twice as much as in Q3/2015
Israeli PE funds investments in 2015
$300M
investment in Bioenergy Infrastructure Group The most prominent deal in Q4/2015
$2.2B
Foreign private equity investments in 2015 (64 percent of the total capital)

25. Private Equity Deals by Year ($m)

26. Private Equity Investments by Sector (%)

27. Thank you Eran Wagner Managing Partner – i3 Equity Partners
Wrap up slide – this has 3 slides in the section
6c – Thank you Slide with speaker contact info

28. The Global Startup Ecosystem Ranking (2015) The Deloitte VC Confidence
Israel in the World
Over 7,000 Companies operating in Israel
The Global Startup Ecosystem Ranking (2015)
The Deloitte VC Confidence
Survey (2015)
The City of Tel-Aviv is ranked 1st in the world outside the US (5th globally)
and Jerusalem is ranked in the top 50
Israel is the 2nd Most trusted market in the world
Source: The 2015 Global Startup Ecosystem Ranking by Startup Compass Inc. (previously Startup Genome)

29. Israel in the World
Country of Origin : Immigrant Founders of Billion Dollar Startup Companies in the US
Source : National Foundation of American History

30. Internet of Things Startups
Copyright © 2016 IoT Israeli Conference. All rights reserved.

31. Israel’s Tech Ecosystem is Evolving
2010…
Copyright © 2016 IoT Israeli Conference. All rights reserved.
All rights reserved to XXXX 31

32. IoT Israel Summit
Past Sponsors include:
The main IoT Conference in Israel, one of the largest in the world
3nd annual IoT Israel conference held Nov. 10th, with 1,000 attendees including:
Speakers from major industry players as well as selected local startups *
Entrepreneurs *
Investors *
Multinational
corporations *
Government *
Local service
providers
Copyright © 2016 IoT Israeli Conference. All rights reserved.