The Israeli Innovation Authority (IIA) published several initiatives, aimed at supporting the innovative Israeli hi-tech industry amid the Swords of Iron War. These initiatives include the following:

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01. Fast-track Grant Program for Companies with a Short Runway

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• A fast-track grant program to support startup companies struggling to raise capital from investors due to the war, with a budget of NIS 400 million.

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• The program will operate from the beginning of November 2023 until the end of February 2024. The IIA will provide a response within a 4-week timeframe, and submission deadlines will occur every two weeks, commencing on November 8, 2023, and concluding on February 1, 2024, at 12:00 PM.

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• This program is part of the R&D Fund program and is intended for innovative technology companies with a short runway (up to 6 months) who are currently in the fundraising process, facing challenges in securing funding from existing investors due to the current situation, and require bridging financing until the next funding round.

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• The program offers financial support of up to 50% of a requested budget (with an additional 10% support for companies located in Israel's development areas and 25% support for companies operating in the Gaza envelope). The maximum budget eligible for the program is NIS 7.5 million for R&D plan for a period of up to 9 months, starting from the month of submission.

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• Companies that have been granted the funding will receive an advance of up to 50% of the approved grant.

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The IIA will consider the following key criteria when evaluating an application:

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• Technological Evaluation: (a) technological and functional product innovation, (b) competitive advantage and propriety of intellectual property, (c) company growth potential, (d) the company’s significant assets (technology, innovative products, sales stage, cohesive teams, customers), and (e) the likelihood of the company surviving the crisis and contribution to the Israeli economy.

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• Financial Evaluation: (a) a runway of up to 6 months and the grant’s contribution to its extension, and (b) low capital availability from existing investors, including the inability to establish a new funding round or agreement with new investors.

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As part of the application, the company will be required to submit, among others, (a) a record of the company's operations for at least three months before the submission of the application and (b) a balance sheet for the period between January 2023 and the end of the month preceding the application submission date.

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For additional information about the program (in Hebrew), please visit this link. 

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02. Relief Measures

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Relief measures for a 90-day period from October 19, 2023, primarily related to deferment of payments and administrative matters. These measures include, among others:

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• Deferral of royalty payments, subject to the payment of accrued interest differential and linkage.

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• Postponement of the deadlines, including for presenting supplementary funding for an additional period of up to three months, subject to the IIA’s approvals.

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• No withholding of grant payments to companies due to outstanding debts under NIS 10,000 or to the absence of a valid accountant's approval.

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For additional information about the relief measures (in Hebrew), please click here.

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