BDO US & Israel Desk - Q2 Report 2023

During Q2, we started noticing early signs point to a positive uptick across the US markets and  a stronger sense of optimism among investors and Institutions. Reassuring signs emerged in the US just a few weeks ago, as the S&P 500 reached bull market territory, surging 20% from its October low. This remarkable growth was said to be driven by investors' confidence in the resilient economic growth of the United States and the anticipated pause in interest-rate hikes by the US Federal Reserve. 

That being said, on the Israeli side a closer look at the Q1 numbers reveals that Israeli high-tech companies secured nearly $1.7 billion in funding across the 105 deals, experiencing a substantial 70% drop from $6.7 billion Q1/2022 and a significant 79% decrease from the peak witnessed in Q4/2021. This news raises more eyebrows when you take into account that almost 40% of the $1.7 billion invested are due to only 3 mega deals: Wiz ($300 million), eToro ($250 million), and Via ($110 million). Current hesitancy among investors and funds can be attributed to the high uncertainty surrounding company valuations in today’s macroeconomic landscape. Nonetheless, many analysts are predicting higher levels of investment activity, as well as an 
increased rate of mergers and acquisitions would likely emerge in the second half of the year.

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