In response to the financial crisis created as a result of the coronavirus pandemic, the Israel Innovation Authority launches a fast-track grants' channel to support research and development of technological projects. The Authority will co-invest with venture capital firms in companies that show high success rates for the long run but currently have limited funding resources and in need of immediate funding.
Aharon Aharon, CEO, Israel Innovation Authority: "The purpose of this fast-track channel is to invest in exceptional companies with substantial assets and high success rates for the long run, but with short runway on funding. This channel will provide them with certainty and cash flow to help successfully traverse this crisis and become a growth engine in the process of overcoming this crisis. The high-tech industry was significantly afflicted by this crisis and is expected to experience a decrease of about 25% in private capital investments and about a quarter of the total sales revenues. As a result, many companies have halted recruitments, are taking employees on unpaid leave and are even planning wide scale layoffs. The high-tech industry depends on global investors more than any other branch in the economy as they are responsible for the majority of the capital that finances this industry. At a time like this, there is real concern that the industry's life-line will be critically affected. An immediate, wise and levelheaded supportive government policy will prevent critical damage to the export, production and income of hundreds of thousands of high-tech employees and the various businesses that support this industry. This policy will be the main anchor in the ability of the Israeli economy to grow back at the culmination of this crisis."
The Authority will run a fast-track grants' channel as part of the R&D Fund's Incentive Program, for companies that need additional funds to successfully traverse this crisis. Responses will be provided within four weeks and a funding deposit of up to 50% or the approved grant will be provided to supplement complementary funding secured by the company.
The fast-track channel is dedicated to support innovative R&D plans of companies in the early stages of growth and in advanced development stages, that attained substantial assets (Intellectual property, funding and net-worth) but their runway is shorter than 12 months and are in urgent need of funding. The Authority's support will be granted to companies with significant capabilities and business potential, and will assist them in successfully overcoming this crisis and in becoming a financial growth engine for the Israeli economy once the crisis has passed. The grant and high advance payment will be provided to companies that present complementary funding by investors.
Companies that approach this channel will be asked to fill out forms for professional evaluation purposes as well as funding documentation for financial evaluation. In additional to the professional evaluation (technology – business) the Authority will calculate the company's cash flow, analyze its financial situation and examine its survival rate as well as the steps it took to traverse this crisis. The runway evaluation and company's survivability will be added to the overall evaluation of the request per the Israel Innovation Authority's R&D Fund Incentive Program's standards.
- Response will be provided within 4 weeks from request submission
- 50% advance payment of the approved grant will be provided immediately (conditional to securing complementary funding)
- Companies can approach the fast-track evaluation without complementary funding (at the submission stage). In such cases, in order to receive the grant and advanced payment, the company will be given additional 3 months to secure complementary funding. In case it will not succeed in securing such complementary funding – the Authority's grant will be revoked.
Companies can submit R&D plans at a total sum of up to 15 million shekels.