Innovation Authority adds $115 million to rescue cash-strapped startups

Funds will support ‘high-functioning companies’ that have a good chance of surviving the crisis but are facing difficulties in raising funds and sales, authority says

Shoshanna Solomon was The Times of Israel's Startups and Business reporter

Aharon Aharon, CEO of the Israel Innovation Authority (Courtesy)
Aharon Aharon, CEO of the Israel Innovation Authority (Courtesy)

The government has approved an additional budget of NIS 390 million ($115 million) to increase investment in small and medium-sized high-tech companies, the Israel Innovation Authority said, following an increased demand for funds generated by the coronavirus crisis.

In April, the authority, in charge of setting out the tech policies for the nation and boosting its startup ecosystem, said it would fast track some NIS 500 million to startups that have been affected by the coronavirus pandemic.

Israel’s tech industry has been significantly afflicted by the coronavirus lockdown and is expected to see a drop of some twenty five percent in private capital investments and around a 25% reduction in total revenues, the Authority forecast in April. As a result, many companies have halted the recruitment of workers, are putting employees on unpaid leave or laying them off.

The Fast Track incentive program “is one of the most effective projects we have launched in response to the financial crisis caused by the coronavirus pandemic,” as it aims to expedite the recovery of the high-tech sector, said Aharon Aharon, the CEO of the Israel Innovation Authority in the statement on Wednesday.

The funds will provide support to “high-functioning companies that have a good chance of transcending the crisis but are currently facing difficulties in raising funds or making sales,” he said. The program’s grants will help these companies get through the current crisis and hopefully become “a future growth” engine of the Israeli economy, once this difficult period is overcome.

Aharon said that the team assessing the grants program has been expanded, so that requests for funding will be processed and decided upon within a four-week timeframe.

In light of the increased demand for funding, the submissions deadline for the fast track grants has been extended by two months until November 19, 2020, the statement said.

Most Popular
read more: