(Communicated by the Finance Ministry International Affairs Department)
Just seven months after it was launched, the program to encourage investments by institutional bodies in the high-tech industry has succeeded in garnering institutional commitments for investing more than NIS 400 million in venture capital funds. The program was formulated as part of a broad set of instruments of "competitive advantage" for promoting the high-tech industry, with the aim of increasing the amount of local capital invested in Israeli industry. The program's stated goal was to raise a sum of NIS 800 million from Israeli institutional bodies during the years 2011-2013.
The majority of Israel's large institutional bodies have declared their intention to invest more than NIS 400 million, in aggregate, in venture capital funds and other investment entities investing in Israeli high-tech companies. This declaration has been backed up by a deposit of earnest money with the Inbal government insurance company. As part of the program, the Ministry of Finance is granting the investors protection for up to 25 percent of their investment.
The program's success and the strong response by the institutional investors are evidence of the realization of the program's objective, which is, essentially, to renew the dialogue between Israeli investors and the venture capital funds. Now, it is up to the funds themselves to complete the mobilization of capital, in collaboration with the Israeli institutional bodies.
Ministry of Finance Director General, Mr. Haim Shani, noted: "The impressive response of the Israeli institutional bodies in joining the program is expected to open an additional financing channel for the Israeli high-tech industry, which is an important strategic asset and source of pride for the Israeli economy that until now has relied primarily on foreign capital."
The Chief Scientist of the Ministry of Industry, Trade and Labor, Mr. Avi Hason, said: "The background for the program is the global financing crisis and the difficulties encountered by companies in raising investments to fund research and development. Its success will contribute greatly to maintaining Israel's relative advantage and strengthening its position as a global leader in technological innovation. We will continue to follow up the needs of the high-tech industry, in order to ensure that this advantage is maintained over the long term."