Israel Launches $25M Seed Investing Program Joshua Shuman
Plan aims to boost early-stage startups with new incentives
Very early-stage technology startups’ fundraising potential will get a boost from a new 80 million shekel ($25 million) Israel Innovation Authority program following three years of stagnation in seed funding, the independent public agency said.
The new Hybrid Seed Incentive Program created by the Economy and Industry Ministry’s Israel Innovation Authority (IIA) encourages seed investors by limiting their investment risk in early ventures after a funding slowdown was exacerbated by the pandemic.
Since 2017, figures show an average annual decrease of about 25% in the number of startups formed in Israel, a trend that the coronavirus crisis has intensified.
Illustrative image of a baby s first steps (NelliSyr; iStock by Getty Images)
The Israel Innovation Authority, in charge of setting out the nation’s policies for the tech sector and fostering the startup ecosystem, has set up a new NIS 80 million ($25 million) fund to encourage investments in early-stage companies that are facing a funding squeeze, in a bid to boost the number of new startups.
Grants from the fund will be given to startups that team up with veteran investors, the authority said in a statement on Wednesday.
Since 2017, there has been an average annual decrease of about 25% in the number of startups being formed in Israel, a negative trend that has intensified against the backdrop of the coronavirus crisis, the authority said in the statement. The objective of this new program is to help seed-stage startups in high-risk fields attract investors and grow.