In a move aimed at enhancing Israel’s global position as a hi-tech hub, the Israeli Innovation Authority (IIA), in collaboration with the Finance Ministry, has approved a comprehensive stimulus package designed to uplift the nation’s hi-tech ecosystem. The plans have been carefully crafted in response to both global and local factors that characterized 2023, such as the persistent decline in the number of new start-ups, the concentration of investments in specific areas, and a rise in the registration rate of Israeli companies abroad.
Among the key components of this initiative is the launch of a Start-up Fund, an annual injection of over half a billion shekels which will support early-stage deep-tech companies at various development stages, offering grants covering 30% to 60% of total funding rounds, depending on the stage.
Additionally, a new investment fund named the YOZMA Fund will be established, encouraging Israeli institutional entities to invest in local venture capital funds. This “Fund of Funds” model will witness an investment of over NIS 4 billion over five years, aiming to fortify the hi-tech ecosystem.
A new way to invest
An innovative fund with an advanced investment model is also set to be established, featuring a tender process allowing international companies to participate. This fund will not only provide financial backing but also establish innovation incubator hubs, fostering global collaboration in deep-tech technological vectors.
These initiatives are an extension of recent programs, including the Fast Track investment program, angel investor clubs, regional technological innovation hubs, and increased grants for the Ideation program (Tnufa Fund).
Finance Minister Bezalel Smotrich emphasized the critical role of the hi-tech sector in propelling the Israeli economy. “The program we are launching today will enable direct funding for young tech companies and provide a significantly larger injection of around a billion dollars to Israeli venture capital funds. I believe in Israeli hi-tech, and I am confident that the Israeli start-up nation will continue to be a global leader,” he said.
Ofir Akunis, Innovation, Science, and Technology Minister, affirmed the government’s commitment to fostering the Israeli tech sector, stating, “The decision to increase the budget of the Innovation Authority is crucial beyond measure. It sends a message that we are committed to fostering the Israeli tech sector.”
The initiative meshes with other aspects of hi-tech
All these efforts complement national programs for artificial intelligence, bio-convergence, and quantum computing, ensuring Israel’s readiness for the next technological trends. The comprehensive stimulus package is poised to invigorate Israel’s hi-tech landscape, with the hope of advancing innovation, diversity, and sustainability in the sector.
Dror Bin, CEO of the Innovation Authority, expressed confidence in the plan, calling it a “strategic decision that will bear fruit for the next decade.” He highlighted the challenges faced by the hi-tech sector, including a decline in new start-ups and a dependence on foreign capital. “The program we are launching today will provide a meaningful response to these challenges and assist the Israeli hi-tech sector in emerging stronger from the current crisis, as has happened in previous downturns,” he said.