Blumberg Capital, trends in venture capital and the israeli ecosystem, barcelona july 2016

Trends in venture capital and the Israeli ecosystem

Trends in Venture Capital

© B l u m b e r g C a p i t a l 2 0 1 6 | C o n fi d e n t i a l

Less IPOs, more late stage funds & acquisitions

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

0

100

200

300

400

0

500

1000

1500

2000

2500

23 20 18

61 45 4875

6 1433 36 39 43 53

35

6429 16

2121 29

48

55 34

42

83 74108

213 252

# of US Technology IPOs# of US Private Financings >= $50mValue of S&P 500 (inflation adjusted)

Source: Jay Ritter (University of Florida), Pitchbook20

01

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

0

10

20

30

40

50

60

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80

22.8

8.611.7

25.829.9

26.4

43.6

31.5

15.4

31.6 32.137.3

46.8

74.6

52.0

Total Deal Value for VC-Backed M&A Transactions$ Billions


Interesting tech trends to watch

IoT

Industrial IoT

Platforms and Cyber Protection

Consumer and Smart Home

Drones

Physical Security

Platforms and control systems

Agriculture and construction

BotsChatbots for Commerce

Customer Support

Automation of processes

BlockchainOnline/mobile

payments

Smart contracts

Fraud Prevention

The Israeli Ecosystem


Investing in Israel

Sources: EY Report, Geektime Annual Startup Report, PwC Exit Report, NASDAQ, Startup Nation Central

#1 Startups Per Capita

89companies on NASDAQ

#1 Expenditures on R&D

per Capita

$4BFunding raised in 2015

$11B 2015 exits and M&A

value

>50% Exports derive from Hi-Tech and Life Sciences


The Israeli Culture“Chutzpah”

OK to fail

Immigrant culture – flexible, understand adversity, inventive

Dream big

Heavy responsibilities at early age

Source: Harvard Business Review, Erin Meyer


Nurturing Environment for Startups

*Source: MapMe, The Marker

Value-add ServicesAccelerators Conferences &

EventsCo-Working

Spaces & Hubs

Press, PR and Research


Government Support• Chief Scientist• Bilateral funds• Government funded accelerators• Economic delegation (IEI)


The IDF - the Worlds Best IncubatorNon – hierarchical, flexible structure Ownership, impact and responsibilityDealing with ambiguityUnique hands-on training

– Cyber security– Big data, infrastructure & NLP– Hardware– And much more…

“There was a team of ten people in one room in the unit. I call it the magic room, because all of them created companies where the average market cap is a half-billion dollars.”

Avishai Avrahami, founder of


Academic and Technical Leadership

#1 TAU has most VC

backed entrepreneursoutside US

(#9 Global)

4 Israeli Universities in top 50 Shanghai

ranking for CS

Sources: Pitchbook, Wallstreet 24/7 special report, OECD, Shanghai Ranking, Worldbank 2010

#2 Among OECD in post high-school education (46% vs

average of 33%)

Israe

l USJap

an

Netherl

ands

Switz

erlan

dRus

sia

Canad

a

Taiwan UK

South

Korea

Icelan

d

Singa

pore

04080

120160

Number of engineers per 10,000 em-ployees

Israe

l

South

Korea US

Canad

aFra

nce

Switz

erlan

d

OECD av

erage

German

y UKIta

lyIre

land

Russia

0%2%4%6%8%

10%Investment in Education as % of GDP


Challenges of the Israeli Ecosystem

Distance from markets Lack of marketing talent

Lack of product design experience

Limited access to follow-on capital


What can we learn from Israel? Dream big,

think creatively

Collaborate with global VCs

and corporations

Provide mentorship

and guidance

Build & support the ecosystem

Don’t be afraid to fail

Think global from day 1

Founders

Investors

© B l u m b e r g C a p i t a l 2 0 1 6 | C o n fi d e n t i a l© B l u m b e r g C a p i t a l 2 0 1 6 | C o n fi d e n t i a l

Blumberg Capital Israeli Investments

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Enterprise Software Marketing & Ad Technologies

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THANK YOUAlon [email protected]