Israel Launches $1 Billion Aid Program to Support Struggling High-Tech Firms Amid Layoffs

The Israeli Innovation Authority and Ministry of Finance have introduced a rapid assistance program totaling one billion shekels to support Israeli high-tech startups and growth companies facing financial difficulties. This initiative aims to prevent mass layoffs and company closures caused by the strengthening of the shekel against the dollar and the rise of artificial intelligence replacing workers. Eligible companies can receive grants of up to 15 million shekels each.

The program targets young startups and growth companies up to 15 years old with annual expenses between 1.5 million and 100 million shekels. To qualify, companies must demonstrate that their expenses exceeded revenues in the past year, that at least half of their expenses are research and development costs, and that at least half of their expenses are incurred in Israel and paid in shekels. The aid is specifically designed for companies with less than 12 months of operational runway left, providing grants intended to extend their activity by six months to reach technological milestones and secure better funding conditions.

Applications opened on July 26, 2026, with responses expected within about a month. The decision to launch this program follows a rapid appreciation of the shekel, which has hurt companies raising capital in dollars but paying salaries in shekels. According to the Innovation Authority, companies that raised funds for two years of operation effectively lost about 20% of their planned runway, forcing earlier capital raises.

Data from two months ago revealed that 62% of companies had begun layoffs, 47% were shifting operations abroad, and 29% had halted new hiring. Dror Bin, CEO of the Innovation Authority, emphasized the strategic importance of maintaining continuity for these companies, calling the high-tech sector Israel's main economic growth engine. Alon Stoppel, chairman of the Innovation Authority, highlighted the state's duty to provide financial support to help companies preserve their human capital and maintain Israel's competitive global position.