TLDR:
- The VC industry is showing interest in Israeli defense tech startups, particularly those founded by combat unit veterans.
- Recent investments by global VC leaders highlight the emergence of a new industry in Israel, drawing attention from international investors.
The article discusses how reservists returning from the battlefield are establishing defense tech startups in Israel, with the VC industry rising to support them. Lior Handelsman, a partner at Grove Ventures and an IDF lieutenant colonel, highlights the need for creative solutions in military technology. Startups like Kela, founded by combat veterans, are securing investments from top VC funds like Sequoia and Lux. Other stealth startups are focusing on solutions for preventing friendly fire and simulating combat scenarios.
The article also emphasizes the rapid growth of the defense tech industry in Israel, with over 160 companies currently operating in the sector. VC funds like General Catalyst and Andreessen Horowitz are visiting Israel to invest in military startups. The global trend towards investing in military technologies has been accelerated by recent conflicts, leading to a boom in defense tech innovations. However, challenges remain in terms of long development times and competing for government contracts.
Overall, the article suggests that Defense Tech could become a prominent investment category, similar to Fintech or Cyber, if companies can develop dual-use technologies that can sustain them during peaceful periods. The potential for growth in the defense tech sector is significant, with the opportunity to generate substantial investments in the future.
