Israeli VC funds to face steep drop in '09

Israeli venture capitalists are expected this year to raise $300 million, setting the stage for a second consecutive year of decline, according to figures released Wednesday by the IVC Research Center.

Israeli venture capital funds are expected this year to post a 62 percent decline over last year, when $793 million was raised.

And should Israeli venture capital funds generate only $300 million, it would put it on par with levels not seen since 2003 to 2004.

(Credit: IVC Research Center)

Last year, Israeli venture capital funds declined 30 percent over the previous year, when $1.14 billion was raised.

But despite the two years of declines, IVC reports that roughly $1 billion in capital still remains available for investment. Of that pool of funds, approximately $400 million is targeted for first-time investments in high-tech companies. The remainder is set aside for follow-on investments in those companies.

Israel over the past decade has also attracted the attention of U.S.-based venture capitalists looking to invest in start-ups operating in the Middle East high-tech center.