How Israel’s military is prioritizing dual-use start-ups to accelerate defense tech

JERUSALEM — As Israel’s military seeks rush new technology into all aspects of what it does, the country’s Ministry of Defense has recognized the need to support smaller startup companies, especially those making dual-use technology that can be used for civil or defense applications.

“The IDF [Israel Defense Forces] need quick answers to their problems, so time-to-market must be fast,” Ministry of Defense Col. Nir Weingold, the head of the planning, economics and IT department at the MoD’s Directorate of Defense Research and Development (DDR&D), told Breaking Defense in a recent one-on-one interview. “We are in huge competition with commercial market because start-ups look to civilian market. So we want to transform commercial capabilities to defense R&D.”

As part of that effort, DDR&D in 2019 created a unique program called Innofense to be an an innovation center that helps partner startups with funding. According to a presentation provided by Weingold, Innofense collaborates with a network of venture capitalists (VCs), and aids with scouting, exposure to commercial technology and “acceleration.” A total of 43 companies have “graduated” from this program, and it is now in its fourth cohort of taking on new companies via a call for proposals.

Breaking Defense spoke to Weingold this month about the importance of the Innofense tech pipeline, efforts to recruit top talent and Israel’s broader Momentum strategy to accelerate tech adoption. His office was festooned with examples of the kind of technology that has put Israel where the IDF considers itself at the forefront of the digital and modern battlefield, including a model of the Firefly loitering munition made by Rafael, for instance.

“We are all about technology,” Weingold said.

This includes priorities such as bioconvergence, lasers, AI, cyber and air defenses. Israel is already developing laser air defenses, a new optionally manned armored vehicle called the Carmel program, and working on other systems such as directed IR countermeasures aircraft protection. Israel’s Ministry of Defense’s DDR&D created programs such as Talpiot and Psagot to recruit top students in the defense-related tech field.

Innofense On The Scene

Weingold explained that the goal of the Ministry’s DDR&D, in particular, is “tech independence and being a one-stop-shop from early basic research to through technology readiness levels, research and development (R&D) and full-scale development (FSD), while maintaining all the time technological superiority and qualitative military edge.”

“This is a collaborator of government sector and other ministries and dual use start-ups to open new markets, including civilian markets alongside defense and support them with the private sector such as VCs or big companies as design partners,” he said.

For start-up companies, the challenge of working in the defense sector is the length of time most procurement takes — an issue well known to Silicon Valley in the US as well. This “valley of death” from research to product is the pitfall the ministry wants to help the dual-use start-ups overcome.

Weingold noted that startup companies want to sprint, and even if the IDF is faster at acquiring new technologies than most peer defense forces, it has to meet the needs of these companies. Innofense is supposed to help fill this gap, cutting through red tape, and connecting the companies with VCs such as Canada’s AWZ Ventures or Chartered Group, according to a slide provided by the ministry.

In each round Innofense has accepted 16 startups. Out of the 43 so far, less than five are purely defense-oriented, Weingold said.

The way that a start-up might produce technology that has military applications, as well as civilian applications, might be through AI or algorithms, for instance. Other tech that might not seem directly connected to defense are important as well, such as green energy, according to Weingold.

He pointed to companies such as DeepKeep that deals with AI attacks, Wonder Robotics which was established in 2019 and now works with Rafael, and others. Israel also has many small companies that have seen success in recent years in the US, such as Smart Shooter and Xtend, he said.

Working With Friends Overseas

Collaboration with the US is also important. The military there is also moving forward with various “shark tank” like innovative ways to bring new technology to the battlefield, including units tailored to using new unmanned systems like the Navy’s Task Force 59, the Air Force’s Task Force 99, the Army’s Task Force 39.

“We have joint working groups, and the US is our biggest ally and friend, and there is real transparency in my opinion in both countries,” Weingold said. “We appreciate all […] the US does to support Israel. We have fruitful collaboration for more than 30 years in missile defense and other fields. We don’t take it for granted.”

Weingold said there are at least seven working groups at the level of the Pentagon’s undersecretary for R&D, Heidi Shyu, and Israel’s chief of the DDR&D, Daniel Gold.

Bradley Bowman, an analyst at the Foundation for Defense of Democracies, noted that while the US and Israel may cooperate closely on tech development, often Jerusalem’s need is more immediate than Washington’s.

“Israel often moves quickly from concept to fielded capabilities because it has no choice,” Bowman told Breaking Defense. “It is surrounded by enemies that regularly launch attacks, and delays in fielding capabilities can have life and death consequences for Israelis. That reality has created a virtue of agility in the Israel defense establishment that can also benefit the United States as it confronts a growing threat from Beijing.”

Bowman noted other US-Israeli defense tech initiatives like the U.S.-Israel Operations-Technology Working Group, established in November 2021. Since then, the working group has convened major meetings in the US and Israel and established six sub-working groups focused on artificial intelligence/autonomy, directed energy, counter-unmanned aerial systems, biotechnology, integrated network systems-of-systems, and hypersonic capabilities.

If the working group identifies military requirements common to both countries and develops combined plans to research, develop, procure, and field weapons systems to both militaries as quickly and economically as possible, Israel can benefit from American economy of scale and the U.S. can benefit from Israeli procurement agility, Bowman said.

The Future Of Defense Innovation In Israel

Companies that go through the Israeli Innofense innovation center get around $50,000 and four months to produce a proof of concept.

Entrants work in an unclassified environment and are thus not bound by any onerous regulations. If they move to the next level, they might get a purchase order or continue to develop their project or end up receiving money from a VC or working with one of Israel’s big three defense companies: Elbit, Rafael or IAI.

“We try to do matchmaking,” said Weingold. “We have ability to create and develop knowledge and know-how and develop the most advanced weapon systems and capabilities and we are trying to maintain a qualitative military edge, which stems from our inherent abilities as a technological ecosystem and technological independence.”

This is a major leap forward from 20 years ago, he said. Many tech companies have opened offices and R&D centers in Israel and there have been large waves in investment.

Weingold said that last year around 100 investors were invited to an Innofense event to see the capabilities of the start-ups.

“We plan for more events like this demonstration day to expose new capabilities and startup in events,” he said.

“I think we can’t rest and need to continue to run fast and even faster so we will maintain our lead and tech,” he said. Weingold points to Israel’s current leadership in UAVs especially. On lasers, which Israel is adding to Iron Dome and wants to also put on aircraft, he says the ground-based Iron Beam will be ready “soon.”