Israel Innovation Authority Expands Startup Fund to Support Early-Stage DeepTech Companies

Increased investment caps, expanded funding rounds, and fundraising flexibility to give early-stage deep-tech companies capital runway for commercial viability

JERUSALEM, ISRAEL, June 28, 2026 /EINPresswire.com/ -- The Israel Innovation Authority today announced a series of updates to its flagship Startup Fund, expanding support for DeepTech companies at the Pre-Seed and Seed stages. The updated framework reflects changes in the global investment environment and the increasing capital requirements of early-stage technology companies by increasing investment caps, expanding eligible financing rounds, and introducing greater flexibility in fundraising processes.

Under this new framework, the Authority's maximum investment in approved DeepTech companies will increase from NIS 1.5 million to NIS 2 million at the Pre-Seed stage and from NIS 5 million to NIS 6 million at the Seed stage. The changes are designed to help startups secure sufficient capital to advance breakthrough technologies, reach key development milestones, and remain competitive in an increasingly challenging fundraising environment.
Gila Gamliel, Minister of Innovation, Science and Technology, said: "Israel's greatest competitive advantage lies in its exceptional human capital and breakthrough ideas. Expanding the Startup Fund provides entrepreneurs in the earliest stages with the oxygen they need to take risks, develop deep technologies, and build companies with global potential. Our objective is to enable more Israeli companies to reach their next milestones, attract investment, and become the growth engines of Israel's economy over the coming decade."

Dror Bin, CEO of the Israel Innovation Authority, added: "Israeli innovation begins with young companies that are willing to tackle major challenges and develop new technologies. This is especially true at the Pre-Seed and Seed stages, where deep-tech companies are at the very beginning of their journey and technological risk is at its highest. At these stages, larger financing rounds are essential to ensure Israeli startups remain competitive internationally. Over the past several years, we have seen a clear shift in the structure of early-stage fundraising. Companies require larger financing rounds at earlier stages, driven by the growing complexity of technological challenges and, more recently, changes in the exchange rate of the U.S. dollar. Our responsibility is to ensure that Israel’s investment tools reflect this new reality and that the Startup Fund enables these companies to reach their next financing milestone from a position of strength. This measure is designed to strengthen Israel's next generation of startups, encourage technological entrepreneurship, and ensure that tomorrow's breakthrough ideas have a genuine opportunity to grow and succeed."

The objective of the Startup Fund is to reduce investor risk when investing in complex, breakthrough deep-tech technologies that involve significant technological risk and long development cycles. The Authority participates in investment rounds by providing match funding of up to 60% at the Pre-Seed stage, 50% at the Seed stage, and 30% at the Series A stage. To preserve the effectiveness of this incentive, the Authority periodically reviews average market financing rounds and updates the level of its investment accordingly.

Israel's investment environment has become increasingly competitive. Market data shows that while securing an investment round has become more challenging, companies that do succeed are raising significantly larger rounds. To address this trend and help breakthrough technology companies secure the level of funding they need to succeed, the Israel Innovation Authority has decided to increase the investment amounts available in the earliest and most critical financing rounds, Pre-Seed and Seed, raise the maximum eligible investment round size, and provide greater flexibility by allowing fundraising periods to be extended in certain cases.

The key changes to the dedicated Pre-Seed and Seed programs under the Startup Fund are as follows:
The Israel Innovation Authority's maximum participation in a Pre-Seed investment round will increase from NIS 1.5 million to NIS 2 million (approximately US$700,000), representing an increase of approximately 33%. At the Seed stage, the Authority's maximum participation will increase from NIS 5 million to NIS 6 million, providing more than US$2 million in non-dilutive funding. The Authority's maximum participation at the Series A stage will remain unchanged at NIS 15 million.

As part of these enhancements, companies operating in National Priority Area A or led by entrepreneurs from under-represented populations will be eligible for even higher investment ceilings. The Authority's maximum participation will increase to NIS 2.2 million at the Pre-Seed stage and NIS 6.6 million at the Seed stage.

In parallel, the maximum eligible investment round under the Pre-Seed program will increase to NIS 6 million (more than US$2 million), while the maximum eligible investment round under the Seed program will increase from NIS 25 million to NIS 30 million (more than US$10 million). These changes will allow companies raising larger financing rounds to apply for investment through the Startup Fund under the program most appropriate to their financing stage.
The updated framework also provides companies with significantly greater flexibility in managing their fundraising process. Applicants will continue to be required to present, at the time of submitting their application, a memorandum of understanding covering at least 15% of the requested investment round.

Following approval by the Israel Innovation Authority, companies will have up to six months to complete the financing round and raise the remaining private investment. This structure enables companies to leverage the Authority's investment commitment when approaching additional investors, increasing the likelihood of successfully completing the round. The revised framework also provides greater flexibility for companies that require additional time to finalize their fundraising.

The Startup Fund is one of the Israel Innovation Authority's core investment programs for early-stage companies, operating through a model that combines government investment with private-sector capital. These updates that will come into effect starting July 15, 2026, are designed to ensure that, even during periods of uncertainty in the capital markets, entrepreneurs can continue developing new technologies, building high-growth companies, and laying the foundations for the next generation of Israeli technology companies.

Raoul Wootliff
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