Israel Quantum Startup Boost: ₪2.5M for Quantum Tech

Israel has always punched above its weight in technology. From cybersecurity to autonomous vehicles, Israeli startups dominate global markets. Now, the government is betting big on the next frontier: Quantum.

The Israel Quantum Startup Boost, managed by the Israel Innovation Authority (IIA), is a ₪2.5 million (approx. $700k USD) non-dilutive grant designed to accelerate quantum startups from the lab to the market.

This is not just money. It is access. Winners get subsidized time in Israel’s national quantum labs—the cryogenic dilution refrigerators, the single-photon detectors, the ion traps—equipment that costs millions of dollars and is otherwise inaccessible to startups.

Israel is positioning itself as the “Quantum Nation.” The government wants to be the place where quantum encryption protects global finance, where quantum sensors detect submarines, and where quantum computers solve drug discovery problems. This grant is the fuel for that ambition.

Key Details at a Glance

What This Opportunity Offers

Non-Dilutive Capital Unlike VC funding, this grant does not take equity. You keep 100% ownership of your company. The only “payback” is royalties on future sales (typically 3-5% of revenue until the grant is repaid, capped at 100% of the grant amount).

Lab Access Israel has world-class quantum research centers:

• Technion Quantum Center: Ion traps, superconducting qubits.
• Weizmann Institute: Quantum optics, quantum materials.
• Hebrew University: Quantum algorithms, quantum machine learning. Winners get subsidized access to these facilities. Instead of paying $10,000/day for lab time, you might pay $1,000/day (or less).

Defense Partnerships Israel’s defense establishment (Rafael, IAI, Elbit) is deeply interested in quantum tech—for secure communications, for navigation without GPS, for sensing. The IIA can facilitate introductions. A pilot project with the IDF is a golden ticket for future funding.

Export Support The IIA helps you navigate export controls (ITAR, Wassenaar). Quantum tech is “dual-use” (civilian and military applications), so selling internationally requires careful compliance. The IIA provides legal and regulatory support.

Who Should Apply

This is for Deep Tech Founders with a PhD and a prototype.

Ideal Candidates:

• The Quantum Computing Startup: You have built a 5-qubit processor using a novel architecture (e.g., topological qubits). You need funding to scale to 50 qubits.
• The Quantum Sensing Company: You have developed a quantum magnetometer that can detect submarines from the air. You need to ruggedize it for field deployment.
• The Quantum Communications Firm: You have a Quantum Key Distribution (QKD) system. You need to integrate it with existing telecom infrastructure.

Eligibility Checklist:

• Incorporation: Must be an Israeli company (Ltd. or LP).
• Age: Company must be less than 7 years old.
• Team: Must have at least one founder with a PhD in physics, computer science, or engineering.
• IP: Must own or have exclusive rights to the core technology.
• Partnership: Must have a collaboration agreement with an Israeli university or research institute.

Insider Tips for a Winning Application

I have tracked the Israeli quantum ecosystem closely. Here is what the IIA is looking for.

1. The “Quantum Advantage” Must Be Clear You must prove that your quantum solution is better than the classical alternative. “Faster” is not enough. How much faster? “Our quantum algorithm solves Problem X in 10 seconds vs. 10 hours for the best classical algorithm.” Be quantitative.

2. The “Dual-Use” Angle Israel’s quantum strategy is driven by national security. If your technology has a defense application, mention it. But be careful—don’t over-classify. You still need to be able to export to civilian markets.

3. The “Talent Retention” Story Israel has a brain drain problem. Many quantum PhDs leave for Google, IBM, or Amazon. The IIA wants to keep talent in Israel. Show how your startup will employ Israeli quantum scientists. “We plan to hire 5 PhDs from Technion over the next 2 years.”

4. The “Standards” Play Quantum is so new that the standards are still being written. If you can contribute to ISO, IEEE, or ETSI standards, you gain strategic influence. Mention any standards work in your proposal.

5. The “Error Correction” Reality Most quantum computers are “NISQ” (Noisy Intermediate-Scale Quantum). They make errors. If your proposal ignores error correction, the panel will doubt your technical depth. Show that you understand the noise and have a mitigation strategy.

Application Timeline

April-May 2025: The Pre-Proposal

• Action: Submit a “Letter of Intent” (LOI). This is a 2-page summary.
• Action: The IIA will tell you if you are “on track” or if you need to pivot.

June-August 2025: The Full Proposal

• Action: Write the detailed R&D plan. This is 20-30 pages.
• Action: Prepare the budget. The IIA has strict rules on what is “eligible” (e.g., salaries yes, office rent no).

September 2025: The Pitch

• Action: You will present to a panel of quantum experts and IIA officials. This is a 20-minute pitch + 40 minutes of Q&A.
• Tip: Bring your CTO. The panel will ask hard technical questions.

November 18, 2025: Decision

• Action: Winners are announced at the Israel Quantum Summit.

Required Materials

• Company Profile: Incorporation documents, cap table.
• Technical Proposal: Detailed R&D milestones.
• Budget: Line-item breakdown (salaries, equipment, materials).
• IP Documentation: Patent filings or exclusive license agreements.
• Letters of Support: From academic collaborators or potential customers.

What Makes an Application Stand Out

The “Moonshot” with a “Stepping Stone” The best proposals have a bold long-term vision (“We will build a 1,000-qubit computer”) and a realistic near-term milestone (“In 18 months, we will demonstrate a 20-qubit system solving a real optimization problem for a logistics company”).

Customer Discovery Don’t just build technology in a vacuum. Show that you have talked to potential customers. “We interviewed 15 CISOs at banks. They all said quantum-safe encryption is their #1 priority for 2027.”

The “Acqui-Hire” Exit Not every quantum startup will IPO. Many will be acquired by Google, Microsoft, or Honeywell for the talent and the IP. If you frame your startup as a potential acquisition target, it shows you understand the market dynamics.

Common Mistakes to Avoid

Ignoring the “Royalty” Clause This is not free money. You will owe royalties. If you plan to give away your product for free (e.g., open-source software), the IIA will not fund you because there is no revenue to collect royalties from.

Over-Promising on Qubits “We will build a 1 million qubit computer in 2 years.” No, you won’t. Be realistic. The panel has PhDs. They know what is possible.

Weak Commercialization Plan “We will sell to enterprises.” Which enterprises? Name them. “We will target pharmaceutical companies doing drug discovery, specifically Teva and Novartis.” Specificity wins.

Frequently Asked Questions

Can foreign nationals be on the team? Yes, but the company must be Israeli, and the R&D must be done in Israel. You cannot outsource the work to a lab in the US.

What is the “Success Fee”? If you raise a large VC round (e.g., Series A), the IIA may ask for a small equity stake (typically 1-3%) in lieu of royalties. This is negotiable.

Can I apply for multiple grants? Yes. You can stack IIA grants with EU Horizon grants or with BIRD Foundation grants (for US-Israel collaborations).

What happens if the technology fails? If you followed the plan and the science just didn’t work out, you usually don’t have to repay the grant. You only repay if you succeed and generate revenue.

How to Apply

1. Visit the IIA Portal: Go to innovationisrael.org.il.
2. Register: Create a company account.
3. Submit LOI: Start with the Letter of Intent.
4. Wait for Feedback: The IIA will guide you on the full proposal.

Israel is building the quantum future. The question is: Will you be part of it?