The Israel Innovation Authority on Sunday lifted the caps of its Startup Fund by 33% at the two earliest funding stages for Israeli deep tech companies, and it added a parallel track offering higher numbers to entrepreneurs from under-represented populations and to companies operating in National Priority Area A. The Pre-Seed ceiling rises from NIS 1.5 million to NIS 2 million, and the Seed ceiling from NIS 5 million to NIS 6 million. Series A, the third IIA track, stays unchanged at NIS 15 million.
The expanded structure also raises the maximum eligible investment round covered by each program: NIS 6 million at Pre-Seed, and NIS 30 million at Seed, up from NIS 25 million. Match funding is layered on top of those caps: the IIA covers up to 60% of a Pre-Seed round, 50% of a Seed round, and 30% of a Series A round. Companies in National Priority Area A and those led by entrepreneurs from under-represented populations get higher ceilings under the same rules, NIS 2.2 million at Pre-Seed and NIS 6.6 million at Seed. Israel Innovation Authority chief executive Dror Bin framed the change as a response to the “growing complexity of technological challenges” and to recent changes in the U.S. dollar exchange rate. The combined moves amount to a deliberate capital bet from Jerusalem that early-stage deep tech in Israel now needs larger checks, sooner, to reach commercial viability.
The New Caps, Stage by Stage
The headline change is the 33% bump at the two earliest stages. Pre-Seed funding from the IIA rises from NIS 1.5 million to NIS 2 million, roughly US$700,000 in the Authority’s own conversion. Seed funding moves from NIS 5 million to NIS 6 million, more than US$2 million in non-dilutive funding. Series A funding remains unchanged at NIS 15 million.
Here is where each stage lands under the new framework. The Authority’s match funding rates remain 60% at Pre-Seed, 50% at Seed, and 30% at Series A.
| Stage | Previous cap | New cap | Approx. USD | Match rate |
|---|---|---|---|---|
| Pre-Seed | NIS 1.5 million | NIS 2 million | ~US$700,000 | up to 60% |
| Seed | NIS 5 million | NIS 6 million | more than US$2 million | 50% |
| Series A | NIS 15 million | NIS 15 million (unchanged) | N/A | 30% |
The percentage bump is identical across the Pre-Seed and Seed tiers, holding the relationship between the two earliest stages constant. The announcement was distributed on Sunday, June 28, 2026, with The Jerusalem Post reporting the news on Tuesday. The new framework takes effect on July 15, 2026, giving founders about two weeks to plan around the change. The Authority framed the announcement as a response to “an increasingly challenging fundraising environment” and to companies “raising significantly larger rounds” in the earliest stages.
Priority Areas Get a Higher Ceiling
The same announcement carries a second, more generous track for two categories of applicants. Companies in National Priority Area A, a category the Authority referenced without defining, can apply for up to NIS 2.2 million at Pre-Seed and NIS 6.6 million at Seed. Entrepreneurs from under-represented populations get the same higher numbers, the Authority said.
Both figures are 10% above the standard ceilings. That is a smaller bump than the headline increase at Pre-Seed, but a meaningful widening of the runway for those specific founders. The Authority did not detail which activities fall inside National Priority Area A in its announcement. The Jerusalem Post, citing Or Haviv, head of innovation at the Arieli Group, pointed to semiconductors, hardware, energy, biotech, and life sciences as the kinds of complex, science- and engineering-driven fields where the new capital is expected to flow. Haviv’s framing, that “these are the sectors that will generate competitive advantage and economic value in the decades ahead,” captures how the under-represented-population tier and the priority-area tier are positioned as complements to the standard cap.
Together, the two tracks stack on top of the standard increase, putting the Priority A Pre-Seed cap at NIS 2.2 million and the Seed cap at NIS 6.6 million, both the highest published under the Startup Fund at their respective stages.
How the Match Funding Works
The Startup Fund does not write checks on its own; it matches private capital already committed to a startup. Pre-Seed applicants can have the IIA cover up to 60% of the round, Seed applicants 50%, and Series A applicants 30%, unchanged from before the announcement.
The 60% figure at Pre-Seed is the highest participation rate the IIA offers across the Startup Fund stages. The rates step down: 50% at Seed, 30% at Series A, calibrating to the larger private rounds typically raised at those stages.
The Authority’s announcement listed three operational changes inside the Startup Fund on top of the new caps:
- The maximum eligible investment round now covered is NIS 6 million at Pre-Seed (more than US$2 million) and NIS 30 million at Seed (more than US$10 million, up from NIS 25 million).
- A 15% MoU threshold at application: startups must show a memorandum of understanding covering at least 15% of the requested investment round when they apply.
- Up to 6 months to close: after IIA approval, companies have up to six months to complete the financing round and raise the remaining private investment.
The framework also gives Priority A and under-represented-population applicants the same six months of runway from the time of approval. None of the new terms are retroactive, the Authority said: existing awardees continue under the terms of their original approval.
Why the Bump, and Why Now
The IIA’s reasoning for the simultaneous bump at both early stages is laid out in three steps. First, the Authority says, the structure of early-stage fundraising has shifted: companies now raise larger rounds at earlier stages than they did several years ago. Second, what the Authority describes as the “growing complexity of technological challenges” makes those larger rounds necessary for deep tech to reach commercial viability. Third, recent changes in the U.S. dollar exchange rate have reshaped how much capital those rounds need to clear in shekel terms.
Over the past several years, we have seen a clear shift in the structure of early-stage fundraising. Companies require larger financing rounds at earlier stages, driven by the growing complexity of technological challenges and, more recently, changes in the exchange rate of the U.S. dollar.
Bin, the IIA’s chief executive, made the comments in the Authority’s Sunday announcement. The framing of the dollar exchange consideration as a driver of the cap change, “changes in the exchange rate of the U.S. dollar,” does not appear in earlier IIA releases. The Jerusalem Post characterized the change as a response to an “increasingly challenging fundraising environment.” The combined effect, the Authority said, is to “ensure that Israel’s investment tools reflect this new reality.” Independent market data referenced in the announcement said companies that do close rounds today are raising “significantly larger” sums than several years ago.
Where ‘Deep Tech’ Shows Up in the Pipeline
The Startup Fund update applies to companies the IIA labels as “DeepTech,” and the Authority’s announcement said deep tech is “among the priorities of the current government.” The Jerusalem Post, citing Haviv, listed the priority fields the update is most likely to fund.
- Semiconductors
- Hardware
- Energy
- Biotech
- Life sciences
The Authority’s program page describes DeepTech as technology with “strong IP, higher risk, longer time to market, and adherence to more stringent regulations.” It does not enumerate specific sectors, leaving the application of the label to each funding decision.
Haviv offered a wider read: “Around the world, we are seeing an accelerating shift toward deep-tech investment, driven by the understanding that these are the sectors that will generate competitive advantage and economic value in the decades ahead.” The Authority’s program description of deep tech focuses on the structural features that make those sectors capital-intensive.
A concrete example of the biotech the Authority has supported is NanoGhost, which won its sixth IIA grant for immuno-oncology work targeting glioblastoma at Ben-Gurion University. NanoGhost is the kind of long-horizon, science-heavy founder the Authority’s match funding is built for. For a broader view of where Israeli deep tech is landing today, Calcalist’s list of the 50 most promising Israeli startups in 2026 catalogs the kinds of names the new Startup Fund caps will be chasing. The Startup Fund update lands in the middle of a wider public-sector push for early-stage deep tech.
The Authority is one of several public-sector bets now chasing the same science-heavy founders. The match funding structure layers public dollars on top of private commitments, leaving the lead to private investors who reach the startup first. That architecture is what makes the Startup Fund different from a direct grant program.
Series A Stays at NIS 15 Million
The Authority’s Series A ceiling under the Startup Fund remains at NIS 15 million, unchanged from the prior framework. Series A is the one stage where the announcement did not move the cap.
Leaving Series A alone while lifting Pre-Seed and Seed by an identical margin applies the largest cap increases to the stages where the Authority’s match funding is highest: up to 60% at Pre-Seed and 50% at Seed, against a 30% floor at Series A. The new announcement frames the change as a response to changes in the global investment environment and to rising capital requirements at earlier stages. The Startup Fund update concentrates the Authority’s increased participation at the front of the funnel.
Frequently Asked Questions
When does the Israel Innovation Authority’s Startup Fund update take effect?
The new funding caps come into force on July 15, 2026. The Authority announced the change on Sunday, June 28, 2026. Existing Startup Fund awardees continue to operate under their original approval terms; the updated cap applies prospectively to new applications.
Who qualifies for the higher NIS 2.2 million and NIS 6.6 million caps?
Two categories qualify for the higher ceilings under the update: companies operating in a designation the Authority calls National Priority Area A, and companies led by entrepreneurs from under-represented populations. The standard caps for those two stages are NIS 2 million at Pre-Seed and NIS 6 million at Seed.
What counts as “deep tech” under the Startup Fund?
DeepTech under the Startup Fund is defined by the Authority’s program page as technology featuring strong IP, higher risk, longer time to market, and adherence to more stringent regulations. The Authority does not enumerate specific sectors, leaving the label to be applied on a case-by-case basis. Citing Haviv of the Arieli Group, The Jerusalem Post pointed to semiconductors, hardware, energy, biotech, and life sciences as fields where the new capital is expected to flow.
How much private investment must an applicant have committed when applying?
Applicants must show a memorandum of understanding covering at least 15% of the requested investment round at the time of application. After IIA approval, the company has up to six months to complete the round and raise the remaining private investment.
Does the cap increase apply to Series A funding?
No change there. Series A under the Startup Fund stays at NIS 15 million, as set in the prior framework. The funding increase applies only to the earlier two stages: Pre-Seed, from NIS 1.5 million to NIS 2 million, and Seed, from NIS 5 million to NIS 6 million.
