Cash-strapped Israel Innovation Authority forced to freeze grants to startups

The Israel Innovation Authority (IIA) announced on Tuesday that due to budgetary shortages it is no longer able to issue new grants. “Since the 2021 state budget has yet to be approved, the IIA has not been assigned its continuing budget framework for this year. In light of this, the Authority is not yet able to approve the issuing of new grants,” read a statement by the government’s tech investment arm.

Every fiscal quarter the IIA receives hundreds of new applications for grants, all of which it will be obligated to put on hold until a new budget framework is allocated to it. In the past, IIA executives had managed to secure budgets to support its activity, but it seems that amid the ongoing national elections campaign, it is incapable of getting the budget transferred in an orderly fashion. “After the budget framework is approved, hopefully in the upcoming days, we will be able to reach decisions regarding applications submitted to the authority in recent months and are still awaiting approval and green light new grant requests. For the sake of clarity, the authority is in possession of the budget necessary to fund grants that were approved in 2020 and will continue to make orderly payments of those. New grant applications can still be submitted and we will reach decisions regarding them once the authority’s operational budget is approved,” the statement added.

The IIA’s newly appointed CEO Dror Bin has yet to enter the position replacing outgoing CEO Aharon Aharon. He is set to begin his role in the upcoming months.

The IIA’s budget for 2020 stood at NIS 2.25 billion ($700 million) and it handed out grants to 1,600 new startups across all technology sectors and stages of product development. It is one of the principal sources of funding for extremely young companies that have yet to raise seed capital.