Calcalist summarized a report from Viola Capital in Israel on the state of Israeli unicorns. Their analysis? Half aren’t unicorns anymore.
This sounds about right to me, and the data they looked at is interesting:
- 40% of unicorn rounds were led by “one-off” investors, tourists. This makes the valuations suspect.
- Israeli startup funding in 2H’22 was back to the pace of 2019. This is probably what we’re all really seeing, or going to see. The Covid Boom is now well in the rear view mirror.
- Nasdaq fell 33% in 2022, EMCLOUD (a basket of leading Cloud and SaaS stocks) fell 46%, and Israeli tech companies that IPO’d in 2022 fell 65%. Startups are “Nasdaq on Steroids” the old saying goes, and 2022 confirmed that. When Nasdaq is on fire, top startups grow in valuation even faster (see, e.g., 2021). And when Nasdaq falls fast, startups fall even further.
The report is specific to Israeli startups, but it’s an interesting summary of what we’re all seeing.