New social impact fund to invest in war-affected young Israeli startups

A group of investors has launched a new social impact fund to help war-affected Israeli early-stage startups with a lifeline as they struggle to raise funds during the ongoing war with the Hamas terror group.

Venture capital firm Southern Israel Bridging Fund (SIBF) created the joint venture together with the Rashi Foundation, an independent private foundation, and the ICA in Israel, a philanthropic foundation, to provide seed funding to Israeli startups that develop technologies that benefit society and pursue ethical practices.

For now, the impact fund has raised an initial $4 million to invest up to $140,000 into early-stage startups each that develop solutions to pressing social challenges such as sustainable agriculture, affordable housing, accessible healthcare, clean technology and financial inclusion. The partners in the joint venture seek to add more funds to boost the base investment.

Israel is almost six months into a war following the October 7 onslaught by Hamas, in which terrorists killed some 1,200 people in Israel’s south, most of them civilians, and abducted hundreds of others.

In response, the Israeli army called up hundreds of thousands of reservists to join the fighting, including thousands of employees of startups and tech firms. The callup presents challenges especially for Israeli early-stage startups, who in the absence of key personnel, are struggling to run their daily operations and are grappling with attaining critical funding for their survival.

SIBF managing partner Or Ben Shoshan said that the fund was created to invest in startups in the north and the Gaza Envelope that have been hit hard since the outbreak of the war on October 7 and need a vital capital injection to get to the next milestone.

“This investment in young startups seeks to provide them with the business impetus to succeed,” Ben Shoshan said. “We see this as an opportunity to invest in Israeli startups and thereby strengthen the resilience of the Israeli ecosystem, which is the second most mature market in the world after Silicon Valley.”

“Israeli technology has always been an important part of the global innovation front and despite all the challenges, we believe it will continue to bring great entrepreneurship to the world,” he added.

SIBF, which manages $450 million in assets, focuses on investments in companies in the areas of renewable energy, food tech, healthcare and agritech, and supports them through to growth financing rounds. To date, SIBF has made investments of several millions of dollars to up to $20 million in a total of 38 tech companies.

Founded in 1984, the Rashi Foundation aims to assist the underprivileged in Israel’s geographic and social periphery, and is involved in projects to advance social mobility and equal opportunity with a focus on education and employment. ICA in Israel, founded by Baron Hirsch, supports and promotes rural development in the Negev and Galilee by funding projects in agriculture, education and tourism.