NIS100 Million Fast-Track to Extend Startups' Runway
Special measures in place to help companies & EU agrees to postponed the application deadlines for leading Horizon European programs
Special measures for Israeli high-tech:
Israel Innovation Authority Announces an NIS100 Million Fast-Track to Extend Startups’ Runway
- Announcing special measures in place to help companies in which the Authority invests and accelerates the transfer of funds to them
- The European Union’s Horizon program responded to the Innovation Authority’s request and postponed the application deadlines for leading European programs
The Israel Innovation Authority will launch a fast-track grant channel with an initial allocation of approximately 100 million NIS for around 100 Israeli startup companies with significant technological assets, and short runways for companies struggling to raise funds from their existing investors during these challenging times. The matching process will include contributions from private investors, which are expected to total more than NIS200 million. The channel, operating under the R&D fund program, is designed for Israeli companies who need additional funds to extend their runway, giving them more time to fully utilize their available resources.
Application for this program will open in November 2023.(Registration for updates on availability for submissions)
Offir Akunis, Minister of Innovation, Science and Technology: “Much like the entire Israeli economy, our high-tech sector was significantly harmed by the crisis. In such times, we are all joining the collective efforts, each in their areas of responsibilities, including the Ministry of Science and the Israel Innovation Authority. Our policy of providing rapid support, in collaboration with the Ministry of Finance, will prevent critical damage to the high-tech industry. This policy will be the central tier in the ability of the Israeli economy and its growth engine to quickly return to a path of growth at the end of the war.”
Dror Bin, CEO of the Israel Innovation Authority, said: “The high-tech sector, which has faced declining investment volumes over the past 18 months, is also impacted by the current crisis. This impact is more pronounced in startup companies that urgently need funding, especially during a challenging period when it is difficult to conduct new financing rounds. The Innovation Authority is committed to continue providing innovative companies with a sufficient security-net to help the Israeli high-tech sector thrive in the post-crisis era.
The grant channel along with a series of special measures are designed to provide interim funding to face the challenges posed by this state of emergency. The Innovation Authority is committed to nurturing innovation and financial growth and will continue to closely monitor the situation in order to plan for additional measures in the future. This step is designed to be a force multiplier for the welcome initiatives put in place by both local and international investors, designed to support the excellent companies that are facing temporary challenges due to the collective war efforts.”
“This grant channel is aimed at technology companies at the product development or initial sales stage with significant technological assets, including companies in the active fundraising phase. The Authority will quickly evaluate applications under different criteria, including: the company’s technological assets, runway, its investors’ available funding, and the impact on employees and infrastructure.”
Bin added: “From mapping the needs of startup companies in Israel, we understand that most of them are experiencing cashflow difficulties, delays and cancellations with potential investors, and the delay of significant projects and technological developments. We will work rapidly to approve the requests; the channel is designed to provide certainty and cashflow that will help companies overcome the crisis and be an economic growth engine upon exiting it.”
In addition, considering the challenges posed by the Iron Swords War, the Research Committee of the Innovation Authority approved a series of relief and supportive measures for high-tech companies to help them deal with the difficulties that have arisen since the outbreak of the war. The concessions were approved with immediate effect, for a duration of 90 days.”
Special measures include:
- Following our request submitted to the EU and the Directorate of the Horizon Europe program to extend the deadline for submissions, we were notified that the submission deadline for the EIC Accelerator program was extended by 20 days (from Oct. 19 to Nov. 8) and in the Pathfinder Challenges program submission deadlines were extended from Oct. 18 to Oct. 25 – This is a significant step and provides Israeli high-tech companies additional 20 days for submissions.
It should be noted that these programs provide substantial grants, whereas companies that are awarded these grants are expected to receive up to 2.5 million Euro in addition to the possibility of gaining equity investment of up to additional 15 million Euro. It should be noted that only last March 5 Israeli companies were awarded a total of about 50 million Euro in grants and equity.
- Extending submission deadline for corrections and clarifications: Clarifications and corrections submission deadline for new applications will be extended beyond the standard 48 hours timeframe
- Postponing the deadline for the presentation of complementary funding by up to three months: Companies will be allowed to postpone the deadline for presenting complementary funding by additional 3 months beyond the initial 60 days stipulated by the procedure. Delay in signing case activation records: companies will have additional 60 days beyond the initial 60 days’ timeframe stipulated by the procedure, to sign the case activation documents. Relaxing the process of signature verification: verification of signatures on documents and reports submitted to the Authority will be allowed to take place via zoom. Submission of reports with no scanned copies: companies will be able to submit their reports in the Companies’ System without having to attach scanned copies.
- Extending the deadline for submission of periodic reports by three months beyond the initial 60 days period stipulated by the procedure.
- Expanding the green lane: An increase of up to 20% in budget line items for periodic reports without the need for prior approval.
- Shorter reporting periods for companies with less than three months remaining until their last reporting period ends allow for continuous cashflow.
- An additional request for changes to the approved plan, beyond the two requests currently available.
- The option to request changes beyond the set deadlines: subject to pre-coordination with the Authority.
- Final reviews without an audit by a qualified accountant (CPA).
- Recognizing accumulated expenses in the final financial report.
- No payment delays for debts of up to 10,000 shekels.
- Companies can submit requests for substantial changes even beyond the deadline stipulated by the procedures
- Extending final technical and financial reports deadline by additional 3 months beyond the 90 days stipulated by the procedure.
- Final audit with no CPA visit: companies may ask to conduct a final review without a visit by an Authority appointed CPA.
- Acknowledgement of accrued expenses: the final financial report will acknowledge expenses accrued during the approved R&D period which were paid and received no later than 120 days after the end of the approved R&D period. In the past only expenses that were paid within 60 days after the R&D period.
- Spread or deferral of royalties and obligations’ payments: the Authority presented a procedure allowing the spread or deferral of royalties and other obligations, subject to interest payments. Individual approval will be granted by a dedicated committee.
- No delay in payments due to debts that did not exceed NIS 10,000 per the last reporting period.
- No payment delays due to a missing CPA certificate: additionally, payments will not be delayed for companies due to the absence of an accountant’s report.