The Israel Innovation Authority on Monday announced a planned government investment of approximately $450 million in Israeli venture capital funds through its government-backed Yozma Fund, a move expected to generate more than $2 billion in total fundraising.
The investment comes in response to a global downturn in venture capital fundraising and local market challenges and aims to stabilize early-stage investment in Israel’s technology sector.
Under the Institutional Investors Incentive Program, institutional investors committed about $365 million total, of which $79 million came from the Yozma Fund’s contribution mechanism, across 11 Israeli VC funds. Officials project this will drive at least $1 billion in fundraising while expanding local institutional participation. The Institutional Investors Program has completed its first phase.
A separate Deep Tech Funds Program approved $85 million in direct investments for nine additional funds targeting long-term technologies like semiconductors, biotechnology and quantum computing, with fundraising goals reaching $1 billion. Deep Tech funds must reach a first closing within six months.
“Israeli venture capital funds play a critical role in the ecosystem, particularly at early stages,” said Dror Bin, CEO of the Israel Innovation Authority. He noted the initiative responds to reduced fundraising driven by global economic shifts and challenges specific to Israel.
Israeli Finance Minister Bezalel Smotrich said the program aims to ensure investment continuity “even during challenging periods.”
Gila Gamliel, Israel’s minister of Innovation, Science and Technology, called the initiative a “strategic move that connects government policy, private capital, and breakthrough entrepreneurship, positioning Israel at the forefront of global development in critical technological fields.”
The Yozma Fund plans to continue investments through 2026.
