Yozma
Israel's first venture capital incentive program (1993-1998), funded with $100 million in government capital: $20 million capitalized the Yozma Fund itself, and $80 million co-invested at ~40% alongside private managers across 10 private VC funds (Gemini, Pitango/Polaris, Star, Walden, Inventech, JVP, Nitzanim, Eurofund, Medica), which together raised $263 million and funded 164 startups by 1998.
Yozma (Hebrew for "initiative") is Israel's pioneering venture capital program, established in 1993 with $100 million in government capital to catalyze a private venture capital industry that barely existed beforehand. It is widely credited as the foundational driver of the modern Israeli tech ecosystem and has been studied as a model for government-backed venture programs worldwide.
How Was the Yozma Program Structured?
Of the government's $100 million commitment, $20 million capitalized the Yozma Fund itself, while the remaining $80 million was used to co-invest at roughly 40% of capital alongside private managers and foreign limited partners, creating ten private venture funds. Each private fund received about $8 million in government capital, with private fund managers making the actual investment decisions and the government holding limited board representation. Fund managers could buy out the government's stake within the program's five-to-seven-year window, and most did.
Which Funds Did Yozma Create?
The ten funds, several of which still operate under evolved names today, included Gemini (paired with Advent Venture Partners of the United States), Inventech (with the Netherlands' Van Leer Group), JVP (with Oxton of the United States), Nitzanim (with Japan's AVX and Kyocera), Eurofund (with Germany's Daimler-Benz and DEG), Medica (with MVP of the United States), Polaris, Star and Walden. Combined, the ten funds raised $263 million by 1998 and invested in 164 Israeli startups, with some portfolio companies receiving joint investment from multiple Yozma funds.
What Happened to the Yozma Fund Itself?
The Yozma Fund privatized in 1997 and became the Yozma Group. The broader government equity program was phased out by 1998 once its pump-priming effect was clear: public venture capital funds, including Yozma's, had accounted for about half of Israeli venture investment in the early 1990s, a share that fell to almost zero by 2000 as private capital took over. By early 2001, capital raised across Israel's venture industry had grown to roughly $5 billion.
How Has Israel Continued Venture Support Since Yozma?
Since Yozma wound down, Israeli government venture support has continued through the Israel Innovation Authority, established in 2005 to co-invest in startups, alongside MAFAT's defense R&D grants and subsidized incubator programs, all building on Yozma's co-investment model but operating at different scales and across different sectors.