The UK has contributed £1 million to the fund and Israel has put in 1 million euros. The entrepreneurs have until March 2019 to access the funding.
The new fund follows an agreement signed by for Universities, Science, Research and Innovation Minister Sam Gyimah MP and Israel Innovation Authority Chief Executive Aharon Aharon earlier this year.
The money is available to projects seeking technological innovation in products, processes or services which have the potential to come to market.
It is being led by Innovate UK, which is part of UK Research and Innovation, a national funding agency investing in science and research, paying up to £250,000 to winning projects.