The Next Defense Giant Will Come from Israel

Israel’s defense-tech revolution is not happening in a vacuum. At the heart of it stands MAFAT (the Israel Ministry of Defense Directorate of Defense R&D) and MAFAT for Startups, creating one of the most dynamic innovation pipelines in the world. By opening doors for startups, accelerating PoCs, and fast-tracking battlefield-ready tech, they have turned Israel into a launchpad for the next generation of defense giants.

From Warfront to Frontline Tech

Since the October 2023 war, more than one-third of Israeli defense-tech startups tracked by Startup Nation Central have been founded. These companies are embedding real battlefield experience into their DNA. Veterans and reservists, armed with civilian tech skills, are transforming lessons from the frontlines into technologies with global impact.
One standout is Regulus Cyber, a pioneer in GPS and satellite cybersecurity. Their technology protects critical defense and civilian systems against spoofing and jamming, and is already attracting international attention.

Heron 2, IAI

Photo: Courtesy of MAFAT

High-Impact Startups Leading the Charge

Xtend: Makers of advanced indoor drones powered by AI, operated remotely from thousands of kilometers away. Used in key operations during the Hamas conflict, Xtend scaled from development to production in record time thanks to prioritized support and rapid IMOD approvals.
Thirdeye Systems: Specialists in early-warning systems for attack drones. The company expanded rapidly post-October 2023 and recently sold a 30% stake to UAE defense giant EDGE in a rare cross-border deal, demonstrating growing global confidence.

VC’s New Frontier: Defense Tech Goes High-Stakes

Lux Capital is not just investing – it’s doubling down. With over $1 billion already deployed globally, they have launched an additional $200 million fund dedicated entirely to defense tech.

Kela: This enigmatic startup is integrating AI and sensors into military systems. With backing from Sequoia, Lux, and In-Q-Tel, Kela is carving its path toward becoming a Western defense-tech powerhouse.

Hermes Hermes™ 900

Photo: IAF

Why Israeli Startups Have the Edge

Operational realism: Many founders are IDF R&D veterans with extensive battlefield insight.
Fast track to market: MAFAT within the IMOD enables startups to leap from PoC to deployment with accelerated approvals and flexible contracting.
Surging global demand: NATO spending is up, and Israel’s defense exports have hit a record $14.8B in 2024, over half to European buyers.
Smart capital: Funds like Lux, Sequoia, and In-Q-Tel see defense as not just a market, but a mission.

In conclusion, by fostering new and innovative defense firms, Israel is building the next generation of global defense-tech giants. With MAFAT’s support and companies like Xtend, Thirdeye, Regulus Cyber, and Kela leading the charge, it is only a matter of time before the world recognizes Israel as the capital of future defense.

For more information:

https://ddrd-mafat.mod.gov.il/en/mafat-for-startups