Wartime Innovation Drives Israel's Defense Technology Growth

JAKARTA When he sees his wartime counterparts having to rely on the eyes and ears to detect enemy drone attacks, Zach Bergerson, a 36-year-old high-tech reserve and professional soldier, feels the need to act. He then developed a mobile technology-based wearable device capable of warning troops against air threats.

His startup, SkyHoop, has now come out of the stealth mode phase and is undergoing trials in Ukraine, with talks underway for a possible trial by the United States Department of Defense.

As US President Donald Trump mediated a ceasefire in Gaza, a number of Israeli startups such as Bergerson actually attracted the attention of investors from within and outside the country. They also see great opportunities from the increasing demand for defense in Europe.

According to data from Startup Nation Central, more than a third of registered Israeli defense technology startups were established after the Hamas deadly attack on October 7, 2023 that sparked the Gaza war.

In June 2025, as Israel launched 12 days of airstrikes on Iran's nuclear and ballistic missile targets, Israel's Defense Ministry reported the success of Israel's air defense system capable of intercepting 86% of Iran's ballistic missile launch.

Reservis Brings Real Solutions From The Battlefield

About 20% of Israel's reserve soldiers come from the high-tech sector. This combination of military experience and civil expertise creates a wave of innovation that attracts attention.

Major investors from US venture capital firms, who were previously reluctant to touch the defense sector because they were considered at risk and full of regulations, are now starting to enter. Local venture firms also appeared.

One of them is Protego Ventures, founded by Lital Leshem, a reserve soldier, in December 2024. They have reviewed about 160 defense companies and managed to raise funds of around $100 million. Leshem estimates they will invest in four companies by the end of this year.

"Reservis came from the battlefield and set up a company to solve the real problems they experienced directly," Leshem was quoted as saying by VOI from Reuters.

Despite being faced with global regulatory and scalability challenges, Leshem is optimistic that this sector can follow in the footsteps of the success of the Israeli cyber industry.

European Market Becomes New Target

If previously the main market was the US, now Israeli startups are starting to target Europe. NATO's new defense policy raising defense spending from 2% to 5% GDP including 3.5% for core needs such as weapons and troops opens up huge opportunities.

According to data from the Ministry of Defense, Israel's defense exports set a record $14.8 billion in 2024, with more than 50% aimed at Europe, up from 35% in 2023.

Despite facing calls for boycotts from several countries, Brigadier General Reserve Yair Kulas, Head of the Ministry of Defense's International Defense Cooperation Directorate, stated that "the buyer still wants the best product."

The impact of the Russian-Ukraine war has made many European countries renew their weapons and send old equipment to Ukraine. Much of the new equipment is now purchased from Israel.

However, Kulas also acknowledged concerns over the political delegitimation of Israel, amid reports that more than 57,000 Palestinians, mostly civilians, died during 21 months of Israeli aggression in Gaza.

"I don't know how this will affect the results by 2025," said Kulas. "But this is clearly a big challenge."

Impact On Israel's Defense Industry

Avi Hasson from Startup Nation Central said the defensive startup trend was similar to the 20-year-old technological revolution which eventually gave birth to a smartphone era.

The new startup has the potential to encourage giant companies such as Elbit Systems, Rafael, and Israel Aerospace Industries to accelerate innovation or acquire startups to maintain technology excellence. "We now live in different worlds," said Hasson.