Israel’s Ministry of Defense quintupled start-up funding in last year

TEL AVIV — The Israeli Ministry of Defense has significantly increased its investment in small companies and start-ups, pouring in approximately $168 million over an 11-month period — five times more than the year before.

“The deepening cooperation between DDR&D [Directorate of Defense, Research & Development] and Israeli startups increases local manufacturing independence and strengthens the Israeli economy,” the ministry said in a statement, adding that it has worked with 86 Israeli startups and small companies over the last year, in addition to another 200 firms with whom DDR&D already worked.

Such a focus on startups and small firms was evident here at the Defense Tech Summit, held at Tel Aviv University last week. Over two days the auditorium was often overflowing, where officials perused the latest innovations from the Israeli tech scene — including several that focused on topics of keen interest since the war with Hamas began last October, like counter-drone systems, medical tech and artificial intelligence.

“Israeli defense tech is at an unprecedented time of growth, due to a sharp rise in global demand and defense spending as well as battle-proven momentum. We see a need for technology in many areas related to global security, in order to drive digitalization, automation and efficiency,” Ilana Sherrington, Director of Global Partnerships for an organization called Startup Nation Central, told Breaking Defense. “The number of new startups is on the rise, as well as more companies developing dual use applications — and investment is following this. With top talent and deep tech expertise, Israel is a natural hub for solutions in this area.”

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The defense ministry’s focus on this subject was clear from the long list of officials who spoke, including presentations by Eyal Zamir, the Director General of the Israel Ministry of Defense; Daniel Gold, the head of Israel’s DDR&D; Avi Berger, the head of the space office at DDR&D; and Moshe Patel, the head of Israel’s Missile Defense Organization.

“We are constantly examining how to intercept drones with other drones and take down enemy drones using nets. During the war, we worked with dozens of startups in the field. We created a methodology for integrating a startup in the field — something the world is still trying to figure out,” Gold said.

On the second day of the summit, several smaller Israeli companies presented their technologies. The counter-drone firm Regulus, for example,  discussed how recent conflicts around the world have illustrated the need for counter measures against various types of unmanned systems.

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Spear, which makes cannister-launched loitering munitions, also discussed its vision for using multiple loitering munitions to observe and strike targets. The trend with unmanned systems and also the need to counter them has progressed to smaller munitions and also smaller systems that can be put on vehicles. Israel’s experience in places such as Gaza and Lebanon have illustrated the need not only for drones that can be easily deployed, but also the need to be able to defend against a wide variety of drones.

Another trend in the presentations was an emphasis on medical technologies that can help in the field. For instance Xmetix showed off its “smart tourniquet.” This was designed to be deployed easily enabling the tourniquet to be placed on an arm or leg by putting it on, then pulling a pin and pressing a button.

The summit also included a discussion of a recent “hackathon” where dozens of teams had competed to solve several challenges identified during the war. One of the issues was making a system that could help carry stretchers over complex terrain. Another system addressed the need to help constrict blood flow in a wound that is not on an extremity, meaning in the neck or some other critical area, so that wounded do not bleed out.

Elsewhere, Sequoia Capital Global Partner Shaun Maguire said he sees sensors and AI as an area ripe for growth.

“Looking to the future, I expect we’ll see enormous sensors for various uses, and Israel can lead this field. Israel is also powerful in the quantum field,” he said. “I don’t think Israel missed the AI train, and the race is still ongoing. On the contrary, Israel is among the leaders in the field, and Israeli companies are among the most successful companies in the sector.”

Zamir, from the ministry, also highlighted AI’s increasing role.

“It is a revolution that brings new knowledge to every aspect of life, including defense capabilities. Whoever adapts first gets a massive advantage. If you are not all in technology, you will fall behind. This may sound visionary, but the future battlefield will allow swarms of mixed combat units – men and unmanned systems fighting together or fully autonomous units operating as one, capable of making their own decisions.”