The European Commission will invest up to €15 million in Israeli companies for the purposes of commercializing products, in exchange for shares. The finance will be granted under a new, eighteen-month pilot program under within the Horizon 2020 research and development funding framework. The pilot program will meant to invest in 20-40 companies out of a budget of €100 million.
The program will operate under the name Accelerator Pilot, and will provide resources for commercialization purposes such as sales and marketing of a finished product. The program will grant the financing to companies developing a product capable of having an impact on the European Union and the world but that it difficult to raise finance on the private market because they are in fields such as cleantech or medical devices. This is the first European Commission scheme in which the Commission will take equity stakes in startup companies.
The funding comes from the European Innovation Council (EIC), and is in addition to research and development grants provided by the program of up to €2.5 million per company. If the pilot program succeeds, it will continue as part of the next Horizon program for the period 2021-2028 with €10 billion to be divided between research and development grants and investment in commercialization.
EIC funding under the Horizon 2020 program is granted to Israeli companies via the Israel Innovation Authority. The program is handled by ISERD - The Israel-EU R&D Directorate, headed by Nili Shalev. Horizon 2020 is the EU's eighth framework program for research and development, with a budget of €77 billion over seven years. Israel pays about €1 billion into the program, and receives support for various projects to the tune of some €1.5 billion.
The program has become an important source of funding for research and development in Israeli industry and in its academic institutions. Besides finance, it offers opportunities for collaboration with European companies and research institutes, and direct contacts in the European market for marketing and sales of products and technologies. Israel is an Associated Country in the program, like Norway and Switzerland, which are not member states of the European Union.
In 2018, 423 Israeli companies and researchers received research and development grants totaling some €180 million. Fifty companies received the maximum grant of €2.5 million.
Published by Globes, Israel business news - en.globes.co.il - on July 8, 2019
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