Israel’s defense‑technology sector is experiencing the fastest growth surge in its history.
By Hezy Laing
Israel’s defense‑technology sector is experiencing one of the fastest growth surges in its history, with the number of new security and dual‑use startups rising sharply over the past five years.
What was once a niche ecosystem dominated by a handful of legacy giants—Israel Aerospace Industries, Rafael, and Elbit Systems—has expanded into a dense network of young companies developing cutting‑edge tools for cyber defense, autonomous warfare, battlefield AI, and next‑generation sensors.
According to industry analysts, more than 500 defense‑related startups now operate in Israel, a dramatic increase from roughly 250 a decade ago, reflecting both global demand and the country’s unique innovation pipeline.
The sharp rise in new defense startups is the result of several converging forces reshaping Israel’s security and technology landscape.
The ongoing regional instability has created an urgent demand for rapid innovation, pushing many veterans of elite IDF technology units to commercialize solutions they originally built for battlefield use.
At the same time, global defense spending has surged, attracting unprecedented levels of venture‑capital investment into dual‑use technologies such as AI, robotics, and cyber defense.
Israel’s tech ecosystem—already one of the world’s most concentrated hubs of engineering talent—has adapted quickly, with incubators, accelerators, and government programs encouraging entrepreneurs to spin out military‑grade technologies into scalable companies.
The result is a perfect storm of operational need, technical expertise, and financial opportunity that has propelled the number of defense startups to record levels.
A wave of new companies has emerged from elite IDF technology units, particularly Unit 8200, Unit 81, and the Air Force’s operational‑tech divisions.
Firms such as Shield AI Israel, XTEND, Roboteam, Smart Shooter, Camero‑Tech, SpearUAV, High Lander, and Cortica Defense are developing systems that range from autonomous drones to AI‑powered targeting platforms.
XTEND has gained international attention for its indoor drone‑control system that allows operators to “teleport” into hostile environments using VR‑style interfaces, while Smart Shooter’s SMASH fire‑control system has already been adopted by multiple NATO militaries.
Other startups are pushing the boundaries of battlefield robotics and sensing.
Roboteam produces lightweight unmanned ground vehicles used for reconnaissance and bomb disposal, SpearUAV has pioneered encapsulated drones deployable from vehicles or personnel, and Camero‑Tech has developed through‑wall imaging systems now indispensable in urban warfare.
Cyber‑focused firms such as Paragon, Toka, CYE, and Cortica Defense are building advanced platforms for digital forensics and AI‑driven threat detection.
With defense exports reaching $13 billion in 2023 and startups claiming a growing share, Israel’s new generation of defense innovators is positioning the country at the forefront of global military technology.
