Israel awards 10 institutional investment firms safety net for tech investments
Institutional investors will be entitled to receive back up to 40% of their original investment in case of losses and will pay the IIA 10% of the difference between the return of their investments and the return received over the same period from state bonds should they make a profit
The IIA announced in July its decision to ease the terms for its plan to encourage institutional investments in early stage startups. According to the update, the minimal investment eligible for protection will be NIS 100 million (approximately $29 million) instead of the original NIS 150 million (approximately $43.5 million) minimum. The maximum investment size for protection will be NIS 300 million (approximately $87 million). The update will also allow several institutional investors to partner on a single protected investment.Requests for investment under the program reached over NIS 3 billion, with around NIS 2 billion ($580 million) ultimately being approved.
Israel’s tech sector was already enjoying significant access to capital even despite the outbreak of the Covid-19 pandemic. Israeli tech companies raised a total of $2.74 billion across 139 deals during the first quarter of 2020, a record amount, according to a joint report released in April by Tel Aviv-based research firm IVC Research Center.
Adam Fisher, a partner at Bessemer Venture Partners, responded to the news on Twitter.