Israeli high-tech exits totaled $23 billion in 2017 thanks to two mega deals that accounted for 72 percent of the total amount – the $15.3 billion acquisition of autonomous driving and vehicle safety technology developer Mobileye by Intel, and the $1.1 billion of drug developer Neuroderm by Japan’s Mitsubishi Tanabe Pharma – according to data released Wednesday by the IVC research firm.
Despite an overall decline in the number of exits, excluding the two mega-deals, exit capital volume was up 19% on 2016 at $6.6 billion. The number of exits dropped 8 percent in 2017 compared to 2016.
Excluding buyouts and exits above $1 billion, a major decrease was seen during 2017 in the number of non-VC-backed exits; 57 deals – the lowest in the past 5 years. The value of non-VC-backed exits continued to decline for the fourth year, down to $2.22 billion in 2017. VC-backed exits performed more steadily and stayed on course, with 44 exits in 2017 totaling $2.88 billion. The data revealed a decrease of 18 percent in the number of exits in small to mid-range deals (up to $100 million) in 2017. The major decline happened in non-VC-backed exits, while VC-backed exits demonstrated a minor decline.
The number of exits above $100 million showed an increase of more than 60 percent, following a slowdown in 2016.
While software and life sciences exit activity slightly increased in terms of amounts and kept to the average number of deals compared to 2016, the number of exits in communications (-29%) and Internet (- 28%) dropped significantly compared to the previous four years. Both sectors suffered from a decrease in exit capital volume.
“While we can see a decrease in several threads of Israeli high-tech, the specifics of this exit report support the known innovative strength of Israeli high-tech”, said Benzi Segev, IVC Research Center CEO.