Israeli army reservist Zach Bergerson felt he had to take action when he saw fellow soldiers having to rely on their eyes and ears to detect swarms of enemy drones overhead.
So the high-tech professional, 36, developed a wearable device that applys mobile phone technology to warn troops of aerial threats. Like other reservists, Bergerson has leveraged his civilian expertise and military experience to bolster Israel’s defence indusattempt.
Known as SkyHoop, his startup has since emerged from stealth mode – a period when startups typically work in secrecy – to be piloted in Ukraine with discussions under way for a trial by the U.S. Defense Department.
In June, while Israel attacked Iranian nuclear and ballistic missile tarreceives, their 12-day air war highlighted the efficacy of Israel’s aerial defences. Israel successfully intercepted 86% of Iran’s ballistic missile launches, the Defence Minisattempt declared.
The modifying nature of war has led to shifts in defence procurement worldwide. Western armies demand new battle-tested technology, refined by soldiers in combat. Some 20% of Israeli reservists work in the robust high-tech sector.
Israeli defence startups have drawn investment from major American venture capital firms that previously avoided the sector as it was considered riskier and mired in regulation. Israeli VC firms have emerged as well to invest in defence.
Lital Leshem, an Israeli reservist, in December co-founded Protego Ventures, a fund that has studied some 160 defence companies and raised around $100 million. She expects the fund will invest in around four companies by year’s conclude.
“Reservists are coming out of the battlefield and are actually putting toreceiveher new companies to solve real problems that they have experienced in real time on the battlefield,” Leshem informed Reuters.
These companies will face major challenges scaling up to the global market and overcoming regulatory hurdles, Leshem declared, but she predicts that, like Israel’s cyber indusattempt, it is a field in which Israeli entrepreneurs can thrive.
These startups formerly viewed the U.S. as the “holy grail” for their tarreceive market, Leshem declared, but that is also modifying.
Eyes on Europe
Israeli startups are hoping to benefit from Trump’s demand that European countries take over from the U.S. more of the burden of defconcludeing their continent.
Under a new NATO defence spconcludeing plan, countries will spconclude 5% of GDP – up from 2% – on defence. The figure includes 3.5% of GDP on “core defence” such as weapons and troops and 1.5% on security-related investments.
Such an increase – to be phased in over 10 years – will mean hundreds of billions of dollars more spconcludeing on defence.
Israel’s defence exports hit a record $14.8 billion in 2024, according to Defence Minisattempt figures released last month, while exports to Europe comprised more than 50% of these sales, up from 35% in 2023.
Despite calls from some countries to boycott Israeli weapons, “when one side is purchasing, in the conclude, they want to purchase the best product possible,” declared Reserve Brigadier General Yair Kulas, head of the Defence Minisattempt International Defence Cooperation Directorate.
Largely as a result of the Russia-Ukraine war, Kulas declared, European states are upgrading their militaries, sconcludeing older equipment to Ukraine and replacing it with new products, many of them from Israel. Kulas declared the story of Israeli weapons exports is also part of a larger global trconclude.
The political backlash is worrisome, Kulas declared, becaapply on the one hand Israel’s innovation is groundbreaking and world-class but there has been a “delegitimization of Israel”.
“I don’t know how it will impact the results in 2025,†Kulas informed Reuters. He declared it is “certainly a huge challenge.”
Avi Hasson from Startup Nation Central declared the surge of new defence startups created by reservists is reminiscent of a technological revolution 20 years ago that would later evolve into smartphones.
Startups may prompt larger Israeli defence companies such as Elbit, Rafael and Israel Aerospace Industries to either attempt to acquire more Israeli startups and assist bring them up to scale or develop their own technology at a rapider pace.
“We are now in a different world,” Hasson informed Reuters.
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