European Investment Fund (EIF) first ever equity investment in Israel

The European Investment Fund (EIF) is making the first ever equity investment in Israel under the European Commission’s InnovFin programme, with a USD 20 million anchor Limited Partner investment in ICV III. This investment is a direct benefit of Israel’s participation in Horizon 2020, the EU Framework Programme for Research and Innovation (2014-2020).

ICV III will invest in Israeli seed and early stage companies developing software, hardware and infrastructure innovation that enhance resource efficiency and sustainability. Target companies will be promoting new technologies and business models that can modernise established industries, particularly those that have been slow to adopt new technologies.

ICV has been making early stage and seed investments in Israel since 2006, and with the support of Horizon 2020, ICV’s third fund will aim to continue backing emerging leaders with USD 75 million of capital. To date, ICV has invested over USD 150 million in over 25 companies from its first two funds.

Following the official launch of the fund in Tel-Aviv today, the high-level delegation met several start-up companies and tested some of their tech products.

“We are proud that EIF has chosen to make its first investment in Israel through ICV”, said Meir Ukeles, one of the founding partners of ICV. “Since inception in 2006, our firm has partnered with entrepreneurs seeking to disrupt some of the largest markets in the world, and given their vast experience as an LP in over 300 VC funds we are thrilled to have EIF as the anchor investor in ICV III. We are excited about opportunities ahead of us, and look forward to making our first investments soon.”

EIF Chief Executive, Pier Luigi Gilibert commented: “We are delighted to be launching our first equity fund in Israel with the support of the InnovFin programme. Israel offers a strong early stage market opportunity and ICV III is an attractive first investment due to its sustainability focus. EIF’s participation in ICV III is an opportunity to support innovation through a fund with an established presence in Israel and unique access to high-quality deal flow.”

Carlos Moedas, Commissioner for Research, Science and Innovation, said: “This deal will open up new ways of funding for research and innovation and support technology uptake in Israel. It is yet another example of how open innovation and being open to the world under Horizon 2020 benefits both the EU and its partners.”

EU Ambassador to Israel, Emanuele Giaufret said: “This new area of investment adds to already successful work done by EU institutions in developing Israeli infrastructure, and technology and innovation sectors. For more than 20 years, Israel has been a partner in the EU’s research and innovation programme creating the right environment for significant investment to be made. Such investments, especially in sustainability, not only encourage the local economy but also prepare Israel to manage its environmental challenges”.

CEO Israel Innovation Authority, Aharon Aharon said: “As the government entity responsible for Israel’s innovation policy and through our involvement in Horizon 2020 via ISERD we are proud of EIF’s investment in Israel. The profound synergy between Israel and Europe as well as the tool set offered by Horizon 2020 framework programme present excellent funding opportunities to support innovation and collaboration initiatives. Such investments present Israeli Start-Up and Scale-Up companies with a substantial growth path and smoother entry to the European market.”

The fund benefits from the InnovFin Equity Facility for Early Stage with the financial backing of Horizon 2020, the EU research and innovation programme. Working with EIF under the InnovFin programme, the fund will offer investees the know-how and connections to the European market while sharing European innovation expertise in the Israeli market.

Israel’s contribution, via the Israel Innovation Authority, to industrial development in Horizon 2020 will total EUR 1.1 billion in seven years. One of the important benefits of this contribution is the involvement of European financial institutions in Israel via investments in venture funds, equity as well as to provide guarantees to the local banks for loans to grown companies.