Israeli Startups Raised a Record $1.4 Billion in January, Despite Pandemic

Notwithstanding the economic crisis from the pandemic, investment in Israeli startups soared in the first month of 2021.

By Yakir Benzion, United With Israel

Despite all the problems happening from the pandemic, the world is still bullish on Israel. A study by Start-Up Nation Central, an organization that promotes new high-tech in Israel, discovered that a record $1.44 billion was invested in Israeli startups in January, Globes reported Thursday.

That investment tops the previous high of $1.2 billion that was raised only a few months ago in September 2020.

Start-Up Nation Central reported that investors pumped more than $100 million each into six different Israeli startups, qualifying for what is termed a “mega rounds” of investment.

Those six companies amounted to just over a billion dollars of investment and accounted for 73% of the record-breaking total, the report said.

The six mega rounds in the first month of 2021 were compared to a total of 21 mega rounds in all of 2020, where the average was just under two mega rounds per month.

According to Globes, the six companies that got the huge cash influxes were: Global payment network developer Rapyd, which raised a whopping $300 million; cloud native software network developer DriveNets raised $208 million, automatic cloud backup company OwnBackup raised $167.5 million; telemedicine app K Health raised $132 million; E-commerce company Resident raised $130 million, and B2B payments company Melio raised $110 million.

“The record level of fundraising in recent months is driven by two effects,” said Start-Up Nation Central director of research Meir Valman. “One is the increasing maturity of the Israeli tech ecosystem, when rapidly growing startups are able to raise much larger rounds. The other is the effect of Covid-19 on Israeli companies, which pivoted rapidly to address the challenges of the pandemic, but they will also stay relevant long after it is gone.”

In recent months, start-ups in Israel have made significant contributions to the global battle against the pandemic. According to Lena Rogovin, Digital Health Analyst at Start-Up Nation Central, start-ups have now taken up the search for innovative solutions for the post-pandemic era, with entrepreneurs inventing and planning for the new normal.