OFFICE OF THE CHIEF SCIENTIST AT THE ISRAELI MINISTRY OF ECONOMY ANNOUNCES TENDER FOR OPERATORS OF TECHNOLOGICAL INNCUBATOR
Following decision by the Ministry of Economy's Director-General, 2 significant changes added to tender: preference for more than single shareholder and raising minimal investment to NIS 50m., in order to provide financial support for incubated companies further down the line
[JERUSALEM – 24th March 2015] The Directorate of Technological Incubators at the Office of the Chief Scientist is embarking on three competitive tenders to choose franchise holders who will establish and manage technological incubators for a period of eight years. During this time, the franchisees will be able to submit requests for state support of innovative technology initiatives which have passed the state's examination and deemed worthy. The incubators will be established in the Golan, in Acre and in Haifa.
The technological incubator program supports innovative early stage technology initiatives and which carry high risk. An initiative accepted by the incubator becomes a company and is received for a period of two years with NIS 2 million in funding, 85% of it in state money. Companies accepted to incubators located in the periphery receive NIS 2.5 million. The remaining 15% is invested by the franchise holder. Government funding is returned to the state only if a company succeeds, through royalties from products developed. Initiatives in cyber, cleantech and medical technology receive a higher amount of government funding.
Chief Scientist Avi Hasson said: "We are looking for new franchise holders who will join the existing franchisees and help Israel's startup industry leap forward. The fact is that in previous tenders the program drew powerful groups and bodies: multinational and local corporations, foreign and Israeli venture capital funds. This testifies to how Israel and this program in particular are seen around the world. Through this program Israeli startups receive extensive exposure in international markets, support and accompaniment - and as a result they increase their chances of success. We receive many requests from countries around the world to learn the principles of the program and implement their own version thereof."
The manager of the Technological Incubator Program at the Office of the Chief Scientist, Anya Eldan, comments that "support of companies in their early stages is critical for their success - many companies find it difficult to raise capital in the private market in the early stages due to the high risk of implementation and integration in the market. At the same time, there has been a sharp decrease in recent years in funding sources in sectors like medical technology and clean tech, where risk is higher and time it takes to return an investment is longer.
"The high attractiveness of the program today comes mainly from significant reforms it underwent in the last few years.
"As a result of the Director-General's instructions, updated in the past days, several changes were made. Most significantly, a group with more than one shareholder can enable more wide-ranging support for companies. Raising the minimal commitment to NIS 50 million can also help prove the capability to support incubated companies further down the line. New franchise holders are expected to give the incubated companies significant added value, in continued investment as well as in business and technology accompaniment, knowledge of relevant markets, ties with strategic partners and potential partners and a capability of supporting pilot products."
Foreign Media Advisor to the Ministry of Economy