What You Should Know:
– The Israel Advanced Technologies Institute (IATI), in partnership with PwC and the Israel Innovation Authority, unveiled its annual Life Science Industry report at the MIXiii Health-Tech.IL conference.
– The report underlines the Israeli life sciences sector’s resilience, unity, and determination to keep operating, innovating, and delivering crucial solutions. While acknowledging the current challenges, the research underscores the importance of continued support and investment to ensure the industry’s long-term success.
Key Findings
- 1,800 Active Companies: Israel boasts a thriving life science industry with 1,800 active companies employing roughly 78,000 people.
- $2.2 Billion Raised in 2023: Israeli life science companies secured $2.2 billion in funding in 2023, reflecting a 40% decrease compared to 2022.
- Funding Breakdown: This funding comprised $400 million from US public funding (a 66% increase from 2022) and $1.7 billion from private funding. Private funding included a little over $1 billion from foreign investors, marking a 50% decrease from 2022 but still exceeding pre-2019 levels.
- Impact of Recent War: The report acknowledges the recent war’s significant impact on funding. It details a slowdown in average deal size, total number of deals, and capital raised throughout the year, with Q4 experiencing a particularly sharp decline ($145 million raised).
Investor Confidence Remains High:
Despite the funding slowdown, the report finds a positive outlook from Israeli venture capitalists (VCs). A survey conducted by IATI among the top 20 VC and investment funds revealed that:
- 59% of VCs Expect No Impact from War: A majority of local VCs (59%) do not anticipate the war to influence their 2024 investment decisions.
- Continued Investment in Israel: Additionally, 62% of VCs indicated plans to allocate at least half of their 2024 funds to Israeli companies.
“The recent challenging environment has undoubtedly challenged the life science and health technology industries but has simultaneously introduced new opportunities for innovation and growth,” said Karin Mayer Rubinstein, CEO & President of IATI. Our latest research shines a light on the challenges life sciences companies in Israel are facing while illustrating the importance of continuing support and investment to ensure continuity.”
