Instead of selling out quickly, Israeli startups are choosing to scale up. That means, the nature of their exits will be different. In the past, we saw dozens of companies sell to global tech giants for $20 million to $40 million.
According to a new report by the IVC Center, the total value of venture-backed mergers and acquisitions of Israeli firms in 2013 soared to a decade high. A total of 35 companies funded by venture capital exited for a total of $4.2 billion.
The $4.2 billion of VC-backed exits is the majority of the $6.64 billion raised in total M&A and IPOs during the fiscal year.
Returns are getting larger and exits fewer, less frequent
The average exit for Israeli companies that raised venture capital hit $120 million this year, easily surpassing the 10-year mean of $55 million. Fewer deals are getting done — the ones that do close are for greater sums, as Israeli startups are focusing more on growing their businesses in lieu of quicker payouts.
That means people who invest in Israeli startups are making more money, too. According to the same report, the average equity ratio for VC-backed companies was 4.6.
Older, more mature firms = more IPOs this year
By most accounts, 2013 was a good year for Israeli investors and entrepreneurs. As the scaling up trend continues, it also means that the pipeline of Israeli companies gearing up for IPOs is also growing.
According to the WSJ, 2014 is shaping up to be a banner year for Israeli IPOs:
Companies that are often mentioned as following in Wix.com’s footsteps include content recommendation firm Outbrain, software distributor ironSource, and advertising technology firms Matomy and Kenshoo. Mobileye, which develops a vehicle crash-prevention system, is also considered a strong contender, as are cybersecurity firms ForeScout and CyberArk.
Here’s a good summary of the major Israeli tech news that went done this past year. [ View the story "Startup Nation 2013: Top high-tech stories out of Israel" on Storify]