JERUSALEM, April 4 (Reuters) – Israeli institutions invested $900 million in the country’s high-tech sector in 2021, a five-fold jump over 2020, the Israel Innovation Authority said on Monday.
The rise came after the authority in 2020 sought to encourage more institutional investment in the country’s robust tech industry, which is a key economic growth driver that accounts for 15% of Israel’s gross domestic product.
Under its programme, the authority offered a government-backed safety net of 2 billion shekels ($623.5 million) for institutional investors’ investments in high-tech firms. They are compensated up to 40% of their investments in high-tech firms made after seven years in the event of a negative yield.
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Burned by the tech bubble that burst in 2000 and hampered by regulatory constraints, Israeli pension funds and other institutions have since shied away from high-tech, during which billions of dollars have been generated by high-profile takeovers or flotations.
Most investments in Israeli tech companies are foreign.
Nine institutional investors are participating in the programme and are entitled to downside protection on their investments in high-tech companies in their early growth and sales stages.
The authority said …….