Israel's incubator program drew record investments in 2006 as participating companies raised a total $250 million, an increase of 43 percent from the previous year, the Ministry of Industry, Trade and Labor said Monday.
"The readiness of the private sector to invest in early stage incubator enterprises, shows the increased success of the program," said Rina Pridor, director of the Technological Incubator program. "The private sector invested over $2.50 for every dollar invested by the government last year."
That investment is becoming increasingly important after Pridor told The Jerusalem Post earlier this month that the program's budget has been cut from NIS 147m. in 2006, to NIS 135m. this year, in line with the general decrease in the Chief Scientist's budget from NIS 1.3 billion to NIS 1.1b. this year.
As such, companies in the program are increasingly finding success in luring the private sector to invest in their operations as the ministry reported that 178 incubator companies raised money last year, compared to 112 in 2005. Ninety-three of those raised $70m. in first-round funding, from the 54 companies that received their first private sector funding in 2005.
Under the umbrella of the Office of the Chief Scientist, the incubator committee gave grants to 78 new companies last year bringing the total number of start-ups in the program to 232. The bulk of those, or 39%, were in the medical device field, while 19% were in the biotechnology sector, 19% in software, 9% in electronics, 4% in environment and the remainder spread between the mechanics, agriculture, materials and communications industries.