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US companies invest in Israeli startups in the interest of the Pentagon

The driving force behind such investments is the belief that Israeli companies will increasingly compete for contracts in the US and Europe

Mar 17, 2025 11:35 169

US companies invest in Israeli startups in the interest of the Pentagon  - 1

US venture capital firms that invest in US defense startups have begun investing in Israeli military technology companies that have emerged after the fighting broke out in Gaza and Lebanon, The Wall Street Journal (WSJ) reported.

According to the publication, the driving force behind such investments is the belief that Israeli companies will increasingly compete for contracts in the US and European countries, where military spending is expected to increase in the coming years. Specifically, Israeli software startup Kela recently received 39 million USD investments from two of the largest American venture capital firms operating in the defense market, as well as from the investment branch of the US Central Intelligence Agency.

Israeli authorities hope that American and other investments in the defense technology sector will lead to the emergence of more such large companies in the country. Currently, companies such as Elbit Systems, Israel Aerospace Industries and Rafael Advanced Defense Systems dominate this area in Israel.

The Israeli Ministry of Defense earlier announced that it would allocate 500 million USD to technology start-ups to develop unmanned vehicles and other systems. According to media reports, the crisis in Ukraine and other armed conflicts around the world, despite criticism of the operation in the Gaza Strip, have led to a sharp increase in interest in Israeli defense technologies. In this regard, the Israeli army has launched a special program to support promising developments. The Ministry of Defense is currently collaborating with 270 startups, 100 of which are directly involved in the program.