$25 Million Program For Assisting New Startups With Investors

This step is a reaction to the decrease of investments of upcoming startups in Israel in recent years.

The IIA (Israel Innovation Authority) declared the start of a new charity program whose objective is to help startups in their inception stage take off, allocating the project NIS 80 million (USD25 million.

The Hybrid Seed Incentive Program of the IIA aims to inspire investments just starting off, that have collected below NIS 3.5 million (USD 1.1 million) by decreasing the risk for possible investors.

The program will provide grants worth 40% of an investment round amounting to NIS3.5 million (USD 1.1 million) to participating firms and 50% of the overall investment round for startups situated in Israel’s geographical area or whose founders belong to under-represented communities like Arab-Israeli, women and ultra-Orthodox in the top-notch industry.

Investors will be given a three-year choice to get shares in the firm they were investing in. After this becomes a success, the first grant amount that Israel Innovation Authority issued will be refunded.

This step comes from the decrease of investments in upcoming startups in recent years, said the agency, and because of the market’s incapabilities arising from the severe risk and complications of investing in firms like these.

The IIA approximates that within three years,  64% of the startups joining the new program will perform another investment round. Israel’s magnitude of seed investments has been dormant in recent years,’ stated Israel Innovation Authority’s chairman Ami Appelbaum. 

‘Equally, investments have increased in later-stage rounds. Also, we have experienced a big decrease in the number of new startups started every year. This decrease has been made worse by the coronavirus pandemic.’

New startups represent the Israeli innovation ecosystem’s future, and for them to thrive, it is paramount to back them in their first stages.’

The latest program ‘will intensify the Israel startups’ reveal of success, trigger the formation of new startups that are extremely important for the innovation ecosystem, and inspire investors to invest in upcoming startups,’ said Appelbaum.

The program presents a wonderful chance for many investors,’ said Anya Eldan, IIA’s VP and head of the startup division.

‘The continuing stalling at inception stage of fundraising in Israel and also the fact that the coronavirus pandemic’s long-term impacts are still unclear needs instant action.’

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