For Immediate Release:
THE OFFICE OF THE CHIEF SCIENTIST AT THE MINISTRY OF ECONOMY CALLS FOR
PROPOSALS FOR ESTABLISHING AND OPERATING TECHNOLOGICAL INCUBATORS IN ISRAEL

Minister of Economy Aryeh Machluf Deri: "Israel is a global hub of
innovation, largely thanks to the Technological Incubators Program. The
program is a magnet for leading investors from around the world and major
corporations competing over the licenses, generating highly innovative
companies. It also allows corporations to invest in Israel at relatively low
risk and introduces them to the Israeli economy."

[Jerusalem, August 2 2015] - The Technological Incubators Program of the
Office of the Chief Scientist at the Ministry of Economy is currently
embarking on three competitive processes to choose four license holders who
will establish and manage technological incubators for a period of eight
years. During this time, the licensees will be able to submit requests for
government support to innovative technological initiatives which have passed
the state’s examination and deemed worthy. The incubators will be
established in the Tel Aviv and Jerusalem areas.

This is the final stage in the reform of the Technological Incubators
Program that began in 2011. Over a period of three years 11 incubator
operators were selected. Their shareholders include major companies such as
Philips, Teva, and Strauss, who won recent bids.

Since its establishment in 1991, the Incubators Program has generated nearly
1,600 companies, dozens of which went on to IPO and over half raising
additional investments.

Prominent companies founded in recent years as a result of the incubator
program achieving outstanding results include: Neuroderm, graduate of the
Ofakim incubator, issued late last year at a value of $164 million (raising
$45 million in the IPO); Steadymed, graduate of the Rad BioMed incubator,
listed this year on NASDAQ at a value of $100 million (raising $40 million
in the IPO); and CyActive, graduate of the JVP Cyber ​​incubator, acquired
this year by PayPal for $60-80 million (becoming PayPal’s development center
in Israel).

The technological incubators program supports innovative early stage
technology initiatives and those which carry high risk. An initiative
accepted by the incubator becomes a company and enters the incubator for a
period of two years with NIS 2 million in funding, 85% of it in government
money. Companies accepted to incubators located in the periphery receive NIS
2.5 million. The remaining 15% is invested by the incubator. Government
funding is returned to the state only if a company succeeds, through
royalties generated by sales from products developed. Initiatives in cyber,
cleantech and medical technology receive a higher amount of government
funding.

As a result of recently updated Director-General's instructions, several
changes were made. Most significantly, preference is given to groups with
more than one shareholder in order to ensure wide-ranging support for
companies. Raising the minimal commitment to NIS 50 million can also help
prove the capability to support incubated companies further down the line.

Chief Scientist at the Ministry of Economy, Avi Hasson: "The Technological
Incubators Program is one of the flagship programs of the Office of the
Chief Scientist, and the recent competitive processes attest to the program’s
appeal, with powerful groups and organizations in the financial and business
areas competing over the right to establish a technological incubator.”

The program is a successful collaboration between the government and the
private sector, and is considered a “major generator” of start-up companies
in Israel. It features a unique model that has generated worldwide interest.

General Manager of Early stage and Incubators Program at the Office of the
Chief Scientist, Anya Eldan, said: "Start-up companies have trouble raising
capital in the private market in the early stages of the product life-cycle,
due to the high risk entailed in the product’s implementation and
penetration into the market. The comprehensive support provided by the
incubator helps entrepreneurs find potential customers and investors, and
perhaps receive assistance in the first pilot project. This competitive
processes will enable the entry of new operators, offering companies
significant value. After their term under the incubator’s tutelage, start-up
companies can boost their chances of raising financial investments, finding
strategic partners, and leaving the incubator as an independent business.”

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