In good news for Israel’s economy, around USD 450 million in public and private money got pumped into nearly a dozen venture capital funds under a programme aimed at sustaining technology investment amid a slowdown in VC markets.
This further consolidates the position of the country’s tech sector, which has remained Jerusalem’s key economic driver, accounting for 20% of output, nearly 15% of jobs and more than 50% of exports.
The investment in 11 Israeli venture funds was made through two tracks in the Israel Innovation Authority’s “Yozma Fund,” the “Institutional Investors Incentive Programme”, and the “Deep Tech Funds Programme.”
About USD 164 million of the total investment came from Yozma alone, with the latter already receiving USD 1 billion in commitments from institutions. It further aims for a total investment of public and private money of USD 2 billion through the two programmes.
“Traditionally, most investment has come from VC funds rather than institutional investors. But the Yozma fund, launched in April 2024, aimed to change that, offering insurance companies, pension funds and other institutional investors a mechanism to enhance returns on their investments in tech-focused Israeli VC funds over the subsequent 20 months,” Reuters reported.
“Fundraising by Israeli venture capital funds has declined sharply in recent years, as part of a global macroeconomic trend driven by changes in capital flows and interest rate environments, as well as challenges unique to Israel,” said Authority CEO Dror Bin, while interacting with the news agency.
He said the “Yozma Fund” supported both generalist funds and those focused on deep tech, and has helped Israeli funds complete fundraising rounds.
“It will continue to invest in 2026, and we hope it will serve as an effective leverage tool for continued investment in Israeli high-tech as activity accelerates following the end of the (Gaza) war,” the official concluded.