Yozma 2.0: Israel Launches Tech Investment Fund

The government of Israel has launched a new fund called Yozma 2.0 to encourage institutional investors, such as insurance companies and pension funds, to increase their investments in high-tech companies. The fund aims to diversify the sources of funding for Israel’s tech sector, which plays a crucial role in the country’s economy.

Key points

• Tech sector accounts for nearly 20% of Israel’s output, 12% of jobs, over 50% of exports, and 25% of tax income
• Traditionally, most investments in Israel’s tech companies have come from venture capital funds
• Yozma 2.0 will offer institutional investors a mechanism to enhance returns on their investments in tech-focused Israeli venture capital funds

About Tech Investment Fund: Yozma 2.0

• Launched by the government of Israel in April 2024
• Aims to encourage institutional investors to invest in Israel’s high-tech companies
• Offers enhanced returns for investments in tech-focused Israel’s venture capital funds
• Israel Innovation Authority to contribute 30 cents for every dollar of institutional investment
• Will allocate $160 million in public money to venture capital funds over 20 months
• Designed to support early-stage Israel’s tech companies, particularly in deep technology sectors
• Aims to diversify funding sources for Israel’s tech sector
• Launched by the Israel Innovation Authority and the Finance Ministry
• The authority will also waive its relative share of returns from these investments, either fully or partially, to enhance returns for participating institutions

Objectives

• Support early-stage Israel tech companies, particularly those in deep technology sectors
• Ensure a robust funding environment for Israeli startups in the coming years
• Help Israel transition from its ongoing conflict with Hamas to a period of growth

Significance of the Tech Sector in Israel’s Economy

• Israel’s tech sector is a key driver of the country’s economy, contributing significantly to output, employment, exports, and tax revenue.
• The government of Israel recognizes the importance of this sector and has taken steps to support its growth, including the launch of the Yozma 2.0 fund.

The Yozma 2.0 fund is a significant initiative by the government of Israel to boost institutional investment in the country’s tech sector. By providing returns, the fund aims to create a more diverse funding environment for Israel’s startups.

Month: Current Affairs - April, 2024

Category: International / World Current Affairs