Israel and South Korea have joined forces to launch an $80 million innovation fund that will invest in cutting-edge startups in both countries.

It will allocate cash to 25 to 30 leading “Deep Tech” businesses – those involved in complex and lengthy research in the hope of making disruptive advances in technology. These companies typically operate in semiconductors, robotics, automotive, quantum computing, cybersecurity and digital health.

The new fund brings together the best of both countries. Israel is known as the Startup Nation because of its genius at innovation; South Korea, a country with five times the population, is recognized as a place to scale that startup and achieve commercial success.

The new NH-OC Global Open Innovation fund is already more than halfway towards its $80 million target, with $32 million from K-Growth, which handles most government investments in South Korea, and $16 million from NH Venture Investment, the venture arm of NongHyup Financial Group, one of the country’s biggest banks.

The South Korean government has chosen OurCrowd, the Jerusalem-based platform that connects 240,000 small-time investors with promising startups, to jointly manage the fund with NH Venture Investment.

The innovation fund will also promote collaboration between the two countries, both of which invest more heavily in research and development as a percentage of GDP than any others (Israel is the top-ranking country in this department; South Korea is second).

“The establishment of the Israel-Korea bilateral fund with the backing of the South Korean government is wonderful news for Israeli high-tech,” said Jon Medved, CEO of OurCrowd.

“South Korea is looking at Israeli innovation to establish its position in the industries of the future that it strives to lead by the end of the decade and beyond.”

He said Israel’s Deep Tech companies will receive direct access to South Korean industrial giants, while South Korean startups will benefit from Israel’s links to leading venture capital investors and foreign tech innovation ecosystems.

Kim Hyun Jin, CEO of NH Venture Investment, emphasized the significance of the deal.

“K-Growth has established this fund to support the global expansion of Korean companies through open innovations with global high-tech enterprises such as innovative Israeli companies,” he said.

“We expect to find Israeli innovation through OurCrowd’s extensive Israeli and global network, to collaborate with Korean high-tech startups to grow together through this fund.”

The Israeli and South Korean governments have jointly invested $77 million in 196 bilateral technology projects in recent years, including $18 million for robot and AI projects in 2023.