Israeli Government Launches $300 Million Emergency Fund to Support Startups Amid Shekel Strengthening

The Israeli government announced an emergency financial support program to help high-tech startups cope with the shekel's strengthening against the dollar. The Ministry of Finance and the Innovation Authority revealed that up to 1 billion shekels (approximately $300 million) will be allocated by the Innovation Authority to cover 33% to 50% of the funding gap for early-stage and growth startups, effectively leveraging a matching mechanism to inject between 2 to 3 billion shekels into the sector by the end of the year.

This funding targets companies with less than 12 months of operational runway, aiming to extend their activity by six months. Eligibility criteria include companies younger than 15 years, annual expenses between 1.5 million and 100 million shekels (with at least half spent on R&D in Israel and in shekels), and revenues not exceeding expenses in the past year. Companies that have not raised capital in the last three years but are revenue-funded must show that at least half of their income is in foreign currency.

The program is not a grant but a loan with interest, repayable from future revenues; if a company fails to survive or generate income, repayment is not required. The Innovation Authority emphasized that the program is a temporary risk management measure to buy time amid current economic uncertainty, not a solution to the structural challenges caused by the shekel's appreciation.

Keren Nevo, Vice President of Growth Division at the Innovation Authority, explained that each application will be individually reviewed, and funding will be denied if the company's distress is due to loss of competitive advantage rather than currency effects. The program follows a similar rapid response launched after October 7, which received 800 applications and approved about one-third.

Dror Bin, CEO of the Innovation Authority, highlighted the strategic importance of sustaining innovation companies through this period, as they are expected to become Israel's future tech giants. The government plans to establish a team to explore long-term measures to enhance Israel's competitiveness in the high-tech sector.