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Impact Investing in Israel
G8 Taskforce Plenary
July 9th, 2015
Yaron Neudorfer
CEO, Social Finance Israel
[email protected]
July 2015
ISRAEL
Others
4%
During 2014
 8.3 million people
 176,000 children born
 23,000 immigrants arrived
Arabs
21%
Projection to 2020
Jews
75%
 9 Million people
 ~50% of the population will be either
Israeli Arabs or Ultra-Orthodox Jews
GDP $40k per capita
An innovation driven economy
(raised from $19 K 10 years ago)
 140 scientists, technicians, and engineers
per 10,000 employees – the highest rate
per capita in the world.
 Israeli tech startup exit amounts
increased by 980% over the past five
years to a record $9.2 billion in 2014.
Unemployment Rate 5.4%
(down from 6.2% in 2013)
GINI Index 0.42
(Level of post-tax-and-transfer inequality)
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Social Impact Investing in Israel
Key initiatives in Israel began to emerge in recent years, but only now starting to take form
and gain traction – conditions align with recommendations from the G8 taskforce, but
guidance and a steering body is needed .
Expected 2015/2016
 Launch of 4 social impact
bonds
2013
2011
First impact fund, with
matching investment from
government, focused on the
Israeli Arab sector
Creation of an Israeli
wholesaler of impact
capital (Big Society Capital
model) – funded with
unclaimed assets ($65M)

Establishment of a Venture
impact fund in Israel
2015
2014
Establishment of a
social-financial
intermediary

2 Impact funds, with matching
investment from
government, focused on social
enterprises tackling
unemployment
A surge in accelerators
with social goals
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Yozma Social Funds
An Israeli government initiative to establish and operate Social “Entrepreneurship” funds, to
invest in social businesses creating employment for populations facing high unemployment.
Goals
Implementation






Impact investment: opening the path for cross sector
collaboration, philanthropy & investors
Developing the social business sector
Exploring new solutions for employment of
disadvantaged population
Tax Credit

2015: Two funds - $7 m each
Investment period: 4 Years
Partners: Government, Philanthropy, Investors
(about 1/3 each)
Comprehensive impact assessment analysis
Gov. incentives to
corporate
Philanthropy
Capital
First loss
Investors
Yozma Funds
Capital
Social Business
$14 M.
for social businesses
tackling unemployment
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Grass Roots – Forming Accelerators With Social Goals
A surge of entrepreneurial programmes managed by non-profits, offering potential
investments in tech-for-good start-ups and social enterprises.
Tech for Good 8200- tech for
impact
Innovation in
peripheral areas
Business to tackle
disabilities
Social business
High-tech
In the Arab sector
Bedouin
entrepreneurship
Social entrepreneurship
in Jerusalem
Social enterprises in
the Israeli Arab
sector
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Social Finance Israel
SFI has developed innovative models to tackle pressing social issues, and will launch two
SiBs in the next few months.
Early Stage
Initial Feasibility
Development Stage
In-depth Research & Coalition Building
Final Stage
Agreements and Financing
Ultra-Orthodox
Male
Employment
Reducing
Recidivism
Improving
K-12 Maths
Child Care
~$10 M.
in SIB’s
this year
Launch
Arab Financial
Empowerment
Tackling
Type 2
Diabetes
Reducing
Dropout
Rates
(Higher
education)
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Social Finance Israel
The two SiBs approaching launch have been presented to the G8 Taskforce, bringing
innovation through unique models developed for the Israeli market – both models built for
scaling up immediately, to include additional outcome payers
Reducing the incidence of Type 2
Diabetes in high-risk pre-diabetics
Reducing Dropout Rates from
Higher Education (Computer
Science & engineering)
Outcome
Payer
H.M.Os and the National Insurance
Institute
Universities and colleges
Scale
Intervention in up to 2,250 high-risk prediabetics
Cost: $5.4m
Working with two institutions, 550 students
with high-risk of dropping out
Cost: $2.1m
Innovation
•
•
•
•
•
Launch
Financing of prevention of healthcare
problems , blending of economic and
health outcomes
Multiple outcome payers pooling
resources across different phases of the
disease to address a common challenge
An integrated, personalized intervention,
supplemented with latest technology
November 2015
•
Non-governmental outcome payers
Economic model based on cashable
increases in revenues.
Creating employment opportunities for
intervention graduates
October 2015
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THANK YOU
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