The Israel Innovation Authority has announced the creation of two new Deep Tech incubators: Square One Labs Build and Edge Medical Ventures.

These incubators will support the development of startups in sectors such as energy, infrastructure, and medical technology over the next five years.

Each incubator will receive up to 40 million shekels (US$10.8 million) in government funding.

Private investments are anticipated to exceed 120 million shekels (US$32.4 million).

This initiative is part of a new “Venture Creation & Building Studio” model, which aims to accelerate early-stage innovation by merging public and private capital.

🔗 Source: Calcalist

🧠 Food for thought

1️⃣ Israel’s evolving incubator model builds on three decades of success

The new Deep Tech incubators represent the latest evolution in Israel’s 33-year history of government-backed innovation programs.

The Technology Incubators Program, established in 1991 to assist Russian immigrant scientists in entrepreneurship, has since accepted over 600 startups across various sectors 1.

This long-running program has produced notable successes including CyActive (acquired by PayPal for $60 million), Protalix Biotherapeutics (developed an FDA-approved treatment for Gaucher disease), and ReWalk, whose medical exoskeletons gained international adoption 1.

The privatization of the incubator program in 2011 marked a strategic shift, maintaining government financial incentives while bringing in private sector management expertise to maximize effectiveness 1.

The new “Venture Creation & Building Studio” model represents a further refinement, applying lessons from both Israel’s own experience and international models to create a more sophisticated blend of public and private capital specifically tailored to deep tech’s unique challenges.

2️⃣ Strategic focus on AI differentiates Israel in the global innovation landscape

Israel’s investment in deep tech incubators aligns with its broader positioning as an AI powerhouse, where investment shares in artificial intelligence are 3-4 times higher than in the US and Europe 2.

Israeli AI startups have experienced a remarkable 173% growth rate since 2014, significantly outpacing non-AI startups in the ecosystem 2.

Recent Israel Innovation Authority developments