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Swords of Iron: Israeli Innovation Authority

In a significant move to fortify Israel’s high-tech sector during this period of uncertainty caused due to the on-going Swords of Iron war, the Israel Innovation Authority (the “IIA”) has acted to provide certain benefits to Israel’s start-up eco-system:

Fast-Track to extend startups runway: the IIA has launched a fast-track funding option – with a current allocation of NIS 400m, to help fund Israeli startup companies with significant technological assets, and short runways and which are struggling to raise funds from their existing investors and shareholders.

This track has launched in November 2023 and will continue until the end of February 2024, with application dates every two weeks.

Under this track, companies will be entitled to receive up to NIS 7.5m capped at 50% of the associated budget applied for.

The main criteria for evaluating the applicant companies include:

Technological: (i) technological and functional innovation; (ii) competitive advantage and strength of underlying intellectual property; (iii) growth potential; (iv) applicant strengths (technology, products, sales, customers, partners, and team); and (v) the potential for return to the Israeli economy.

Financial: (i) runway of no more than six (6) months and the grant’s contribution to its extension; and (ii) low capital availability from existing company investors and shareholders.

Reliefs and supporting measures for a period of 90 days: the IIA has approved (for an initial period of 90 days from 19 October 2023), a series of relief and supportive measures for companies subject to current funding obligations with the IIA, in order to help them deal with the difficulties that have arisen since the outbreak of the Swords of Iron war.

These concessions include extended periods for filings, presentation of complementary funding, and signature of case activation documents, enabling of remote (zoom) execution of documents, an automatic 20% budget increase per line item, and allowing for an additional program change request where needed.

* This newsletter is provided for informational purposes only, is general in nature, does not constitute a legal opinion or legal advice and should not be relied on as such. If you are seeking legal advice, it is essential to review the specific facts of each case in detail with a qualified lawyer.

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