The Israel Innovation Authority has invested approximately USD 450 million in Israeli venture capital funds through its government-backed Yozma Fund, aiming to leverage more than USD 2 billion in total fundraising and support continued investment in technology amid a prolonged global slowdown in venture capital markets.

Under the Institutional Investors Incentive Program, institutional investors have so far committed total investments of approximately USD 365 million, including approximately USD 79 million from the Yozma Fund, across 11 Israeli venture capital funds. These commitments are expected to lead to estimated fundraising of at least USD 1 billion, significantly expanding the participation of local institutional capital in Israel’s innovation ecosystem. The institutional program has recently completed the first phase of its implementation, marked by the achievement of a significant milestone in the form of hundreds of millions of dollars in investment commitments from Israeli institutional investors, demonstrating the mechanism’s ability to generate real change in the market.

In parallel, under the Deep Tech Funds Program, direct investments totaling approximately USD 85 million have been approved for nine additional Israeli venture capital funds, against an overall fundraising target of USD 1 billion. As part of the program’s conditions, the funds approved for investment in December are required to reach a first closing within six months of approval, a requirement that accelerates fundraising processes and enables the start of actual investment activity in the short term.

Bezalel Smotrich, Minister of Finance, said, Minister of Finance, said:

Israel is committed to strengthening Israeli high-tech and safeguarding its status as a central engine of economic growth. Through the Yozma Fund, we are injecting government capital that catalyzes private investment totaling billions of dollars, strengthens local venture capital funds, and ensures continuity of investment even during challenging periods. This is an important economic move that establishes a stable financial foundation for Israeli entrepreneurship and reinforces the resilience of the Israeli economy over the long term.

Gila Gamliel, Minister of Innovation, Science and Technology, said:

Deep technologies form the foundation of Israel’s competitive advantage in the decades ahead, yet they require patient capital, expertise, and long-term support. Investment in venture capital funds through the Yozma Fund is designed to ensure that Israeli innovation at the forefront of science and technology continues to grow even under challenging market conditions. This is a strategic move that connects government policy, private capital, and breakthrough entrepreneurship, positioning Israel at the forefront of global development in critical technological fields.

Dror Bin, CEO of the Israel Innovation Authority, said:

Fundraising by Israeli venture capital funds has declined sharply in recent years, as part of a global macroeconomic trend driven by changes in capital flows and interest rate environments, as well as challenges unique to Israel. Israeli venture capital funds play a critical role in the ecosystem, particularly at early stages. Accordingly, we took immediate action to encourage LPs of Israeli funds to move forward with their commitments.

The Yozma Fund provides support both to generalist funds and to funds focused on deep tech, and to date has driven investment activity and enabled Israeli funds to complete fundraising rounds. The Yozma Fund will continue to invest in 2026, and we hope it will serve as an effective leverage tool for continued investment in Israeli high-tech as activity accelerates following the end of the war.

Kfir Batat, Deputy Director General of the Budgets Department, Ministry of Finance, said:

The Yozma 2.0 Program is designed to increase local investment in the high-tech sector and create long-term financial stability. The new deep tech program launching now will help Israeli venture capital funds specializing in deep technology bridge financing challenges and strengthen the resilience of the local industry operating at the forefront of global technology. This step is part of a broader set of measures promoted by the Ministry of Finance in cooperation with the Israel Innovation Authority to improve the business environment, strengthen R&D infrastructure, and advance human capital in the technology sector.

About the Yozma Fund

The Innovation Authority’s Yozma Fund is designed to invest in venture capital funds in order to preserve and further develop Israel’s investment market and create an optimal financing environment for Israeli high-tech companies. The fund operates through two complementary programs:

Institutional Investors Program

This program was established to address one of the key challenges of Israel’s venture capital market: the limited allocation of local institutional capital to Israeli venture capital funds. The program expands the interface between Israeli venture capital funds and Israeli institutional investors by offering a unique excess-return mechanism to institutional investors that invest in Israeli venture capital funds.

Under this mechanism, the Authority co-invests alongside institutional investors at a ratio of USD 0.30 for every dollar invested in funds selected by the institutional investor. This structure creates a meaningful incentive to increase the exposure of long-term savings capital to Israeli high-tech.

This combination strengthens local funds, encourages finalization of funding even during challenging periods, and contributes to the creation of a broader and more stable investment base for Israeli technology companies across all stages of germination and growth.

Eleven leading Israeli institutional investors are participating in the program, with a total allocation of approximately USD 140 million. Of this amount, approximately USD 79 million from the Authority’s budget was utilized by institutional investors in 2025, leveraging total investment commitments of approximately USD 365 million across 11 Israeli venture capital funds. These commitments have led, and are expected to continue to lead, to aggregate fundraising of at least USD 1 billion. The remaining institutional investments under the program are expected to be completed in 2026.

Deep Tech Funds Program

The Deep Tech Funds Program operates as a Fund of Funds, investing directly in funds specializing in deep technologies. One of the program’s primary objectives was to assist funds in reaching a first closing, recognizing that this stage is a critical milestone for deep tech funds in completing fundraising, establishing credibility with LPs, and commencing investment activity.

The program was launched based on the understanding that deep technologies are a strategic engine for the long-term growth of Israeli high-tech, while also requiring patient capital, specialized expertise, and sustained professional support. Through government investment as a Fund of Funds, the program enables the establishment and strengthening of specialized funds in areas such as semiconductors, biotechnology, advanced materials, quantum technologies, agro-foodtech, and more.

The initiative is intended to ensure that Israeli companies operating at the technological frontier have access to dedicated funding sources and experienced funds, even during periods of uncertainty in international markets.

Under the Deep Tech Funds Program, nine Israeli venture capital funds were selected, with investments from the Yozma Fund totaling approximately USD 85 million. Upon full closing, these funds are expected to raise an estimated total of approximately USD 1 billion, including the Authority’s investment. The funds are expected to complete their first closing in the coming months and reach final closing within 18 months, in accordance with the program’s terms.

The selected funds target a range of company stages, from early-stage to later-stage investments, and span diverse sectors.

The investment framework is designed to increase the likelihood of success for venture capital funds launching new funds, at the stage where they are shaping fund structure, completing fundraising, and preparing to begin investment activity. In such cases, it is customary for venture capital funds to determine the timing and manner of public disclosure, based on business considerations and fundraising progress.

Over the coming year, as these funds mature and investment activity advances, the results of the initiative are expected to become visible through the establishment of new funds and investments in deep tech companies.

Material by Iva Abadjievа

Image: Freepik

Ontotext Receives Growth Funding to Expand in the US, Strengthen its Leadership in the Knowledge Graph Market and Develop Industry-specific Offerings

The Integral-led international investment consortium also includes PortfoLion Capital Partners, the venture capital and private equity arm of OTP Bank, and Carpathian Partners, a specialized technology-focused investment platform based in London. The Consortium’s investment in excess of €30 million will be structured as a combination of a capital increase and a secondary share purchase.

Evtim Chesnovski, the partner leading the transaction in Integral Venture Partners, said:

“We have been working with the company and our advisers for months to develop a strong conviction about Ontotext’s market and business model. Together with our co-investors from Portfolion and Carpathian we are looking to support the acceleration of Ontotext’s international expansion and the augmentation of its products. “

Supported by new capital, Ontotext will accelerate its international expansion and go-to-market operations, focusing on the US market.  The company will invest in further development of their vertical product stack – end-to-end solutions for specific industries starting with Life Sciences and Financial Services. Last but not least, Ontotext will further strengthen its position as global leader in knowledge graph technology.

Atanas Kiryakov, CEO of Ontotext, commented:

“I am impressed by Integral’s dedication and the comprehensive approach to understand our business and analyze its potential. This investment will help us turn our excellent technology and market recognition into a great business!”

The transaction is not subject to any regulatory approvals and is expected to close by August 2022. The terms of the investment were not disclosed.

Ontotext is a global leader in enterprise knowledge graph technology and semantic database engines. Ontotext employs big knowledge graphs to enable unified data access and cognitive analytics via text mining and integration of data across multiple sources. Ontotext GraphDB engine and Ontotext Platform power business-critical systems in the biggest financial services, publishing, healthcare, pharma, manufacturing companies and public sectors.

Integral Venture Partners manages institutional private equity and growth capital and is focused on investments in the countries of central and south-eastern Europe. Integral’s fund is backed by leading international institutional investors, including the EIF, the EBRD and the IFC. Integral covers its pan-regional target market out of hubs in London, Budapest and Belgrade.

Python is one of the top programming languages used among artificial intelligence and machine learning developers and data scientists, but as Behzad Nasre, co-founder and CEO of Bodo.ai, points out, it is challenging to use when handling large-scale data.

Bodo does this via a compiler technology that automates the parallelization so that data and ML developers don’t have to use new libraries, APIs or rewrite Python into other programming languages or graphics processing unit code to achieve scalability. Its technology is being used to make data analytics tools in real time and is being used across industries like financial, telecommunications, retail and manufacturing. Bodo.ai, headquartered in San Francisco, was founded in 2019 by Nasre and Ehsan Totoni, CTO, to make Python higher performing and production ready Totoni said:

“For the AI revolution to happen, developers have to be able to write code in simple Python, and that high-performance capability will open new doors. Right now, they rely on specialists to rewrite them, and that is not efficient.”

Daniel Docter, managing director at Dell Technologies, heard about Bodo from a data scientist friend who told Docter that Bodo’s preliminary results “were amazing.”

Much of Dell’s investments are in the early-stage and in deep tech founders that understand the problem. Docter puts Totoni and Nasre in that category. He said:

“Ehsan fits this perfectly, he has super deep technology knowledge and went out specifically to solve the problem. Behzad, being from Intel, saw and lived with the problem, especially seeing Hadoop fail and Spark take its place.”

Meanwhile, with the new funding, Nasre intends to triple the size of the team and invest in R&D to build and scale the company. It will also be developing a marketing and sales team.