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At the “Definitely Defense” conference, organized by iHLS in collaboration with Amit Pollak Matalon & Co. and Deloitte, a panel of leading experts gathered to discuss the growing defense-tech sector and its investment potential. The panel included Adv. Yoav Etzyon, Managing Partner at APM & Co.; Rotem Yehuda Kakon, Strategic Investor at Family Office; Lital Leshem, Co-Founder of Protego Ventures; Rotem Eldar, Managing Partner at 10D; and Jason Wolf, Co-Founder of Iron Nation. Together, they provided valuable insights into the evolution of defense tech, opportunities for investors, and the challenges faced by startups in this dynamic field.
The Rise of Defense Tech
the defense-tech industry in Israel has recently been growing at an accelerated rate. While the industry is gaining momentum, the panelists mentioned that Israel still has room to grow in order to match the U.S., which has been a leader in the field for years. Rotem Eldar noted that the pace of technological advancements in warfare—such as drones and loitering munitions—has been accelerating, partly due to recent conflicts like the Russia-Ukraine war and the Swords of Iron War. These developments are pushing military forces to adopt more agile, innovative solutions, creating a ripe environment for defense-tech startups. Eldar highlighted that Israel, with its strong operational expertise and agile defense ecosystem, is in a prime position to compete on the global stage in this rapidly evolving sector.
Israel’s Global Advantage
Rotem Yehuda Kakon emphasized Israel’s strong position in the global defense-tech market. Israel has built a reputation as one of the top 10 defense exporters worldwide, thanks to its skilled workforce and innovation-driven culture. Kakon hypothesized that because of the ongoing war, soldiers would soon start developing solutions for problems they had experienced on the battlefield, which could be turned into breakthrough technologies. This operational experience provides Israel with a competitive edge that will continue to drive innovation and attract international interest in Israeli defense-tech solutions.
Attractive Investment Areas in Defense Tech
Lital Leshem discussed the areas most attractive to venture capitalists in defense tech. She pointed out that software-based solutions are particularly appealing to investors because they tend to be more agile and scalable than hardware. Software solutions allow for faster development and can be more easily integrated into existing systems. Jason Wolf agreed, explaining that software is a product that can quickly yield value.
Rotem Eldar further explained that Israeli startups are moving beyond creating add-on features and are now developing complete, integrated solutions. These full-stack solutions must be compatible with existing defense platforms, allowing them to meet the needs of modern military forces effectively.
Challenges in Defense Tech
There are some unique challenges the defense-tech sector faces, including regulatory hurdles and difficulty securing investments. Kakon noted that while the potential for innovation in defense tech is enormous, startups often struggle to secure funding, particularly in the early stages. The industry lacks a well-established investment pyramid, making it harder for small companies to scale.
Wolf highlighted the importance of having a global perspective. He stressed that Israeli defense-tech companies should look beyond local markets and focus on international needs to maximize their growth potential. Leshem reiterated this claim, explaining that the U.S. constitutes a large percentage of the global defense consumers, and therefore taking into account its needs could have a large impact on the likelihood of receiving an investment.
Conclusion: A Growing Opportunity
There are immense opportunities in the defense-tech sector, particularly for Israeli startups. As global security needs continue to evolve, defense tech will play a pivotal role in shaping the future of defense. With the right investments, strategic international partnerships, and a focus on scalable, integrated solutions, Israel is poised to be at the forefront of defense technology innovation.
