Blumberg Capital

1. Trends in venture capital and the Israeli
ecosystem

2. Trends in Venture Capital

3. © B l u m b e r g C a p i t a l 2 0 1 6 | C o n f i d e n t i a l
Less IPOs, more late stage funds & acquisitions
23 20 18
61
45 48
75
6 14
33 36 39 43 53
35
64
29
16
21
21
29
48
55 34
42
83 74
108
213 252
0
500
1000
1500
2000
2500
0
100
200
300
400
200120022003200420052006200720082009201020112012201320142015
# of US Private Financings >= $50m
# of US Technology IPOs
Value of S&P 500 (inflation adjusted)
Source: Jay Ritter (University of Florida), Pitchbook
22.8
8.6
11.7
25.8
29.9
26.4
43.6
31.5
15.4
31.6 32.1
37.3
46.8
74.6
52.0
0
10
20
30
40
50
60
70
80
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
$ Billions
Total Deal Value for VC-Backed M&A Transactions

4. © B l u m b e r g C a p i t a l 2 0 1 6 | C o n f i d e n t i a l
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
Bots
Chatbots for
Commerce
Customer Support
Automation of
processes
Blockchain
Online/mobile
payments
Smart contracts
Fraud Prevention

5. The Israeli Ecosystem

6. © B l u m b e r g C a p i t a l 2 0 1 6 | C o n f i d e n t i a l
Investing in Israel
Sources: EY Report, Geektime Annual Startup Report, PwC Exit Report, NASDAQ, Startup Nation Central
#1
Startups
Per Capita
89
companies on
NASDAQ
#1
Expenditures on R&D
per Capita
$4B
Funding raised in
2015
$11B
2015 exits and M&A
value
>50%
Exports derive from Hi-
Tech and Life Sciences

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

8. © B l u m b e r g C a p i t a l 2 0 1 6 | C o n f i d e n t i a l
Nurturing Environment for Startups
*Source: MapMe, The Marker
Value-add ServicesAccelerators
Conferences &
Events
Co-Working Spaces
& Hubs
Press, PR and
Research

9. © B l u m b e r g C a p i t a l 2 0 1 6 | C o n f i d e n t i a l
Government Support
• Chief Scientist
• Bilateral funds
• Government funded accelerators
• Economic delegation (IEI)

10. © B l u m b e r g C a p i t a l 2 0 1 6 | C o n f i d e n t i a l
The IDF - the Worlds Best Incubator
• Non – hierarchical, flexible structure
• Ownership, impact and responsibility
• Dealing with ambiguity
• Unique 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

11. © B l u m b e r g C a p i t a l 2 0 1 6 | C o n f i d e n t i a l
Academic and Technical Leadership
#1
TAU has most VC
backed
entrepreneurs
outside 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%)
0
20
40
60
80
100
120
140
160
Number of engineers per 10,000 employees
0%
2%
4%
6%
8%
10%
Investment in Education as % of GDP

12. © B l u m b e r g C a p i t a l 2 0 1 6 | C o n f i d e n t i a l
Challenges of the Israeli Ecosystem
Distance from markets Lack of marketing talent
Lack of product design
experience
Limited access to follow-on
capital

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

14. © B l u m b e r g C a p i t a l 2 0 1 6 | C o n f i 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 f i d e n t i a l
Blumberg Capital Israeli Investments
√
Cyber Security Financial Technology Commerce
SAM
Enterprise Software Marketing & Ad Technologies
Sealights

15. THANK YOU
Alon Lifshitz
alon@blumbergcapital.com