Israel Defense Forces to give startups $500M to develop drones

Start-ups funded by the Israeli Defense Ministry have attracted half a billion dollars in investments during the Gaza war, a senior Defense Ministry official told The Jerusalem Post, Report informs.

The official, Defense Ministry Head of the Planning, Economics & IT Department Col. (res.) Nir Weingold also told the Post that the Russian invasion of Ukraine and potential conflicts in Asia relating to China have led to unprecedented interest globally in Israeli defense technology, despite criticism relating to the Gaza war.

More specifically, Weingold said that during the war, 30% of alumni of 100 start-ups from a special program to selectively give out seed funding not only secured follow-up R&D orders directly from the Defense Ministry totaling more than $5 million but also attracted outside investors’ funding exceeding half a billion dollars.

In July, the Defense Ministry’s Directorate of Defense Research and Development (DDR&D) hosted a Demo Day, spotlighting the latest innovations from start-ups participating in its Innofense accelerator program.

The July event “showed off the third- and fourth-round demonstrations for investors,” though the ministry is now off and running with its fifth round of start-ups, Weingold stated.

According to Weingold, “There were 100 investors, including the top ones, and we got great feedback. This was a real jump in the level of investment attention and quality compared to the last similar event in February 2023.”

The event, said the ministry, highlighted the achievements of these start-ups, providing them with a platform to present their cutting-edge products to investors, engage in networking opportunities, and frame their crucial role during the war, where their projects significantly bolstered R&D efforts.

Weingold said Innofense has continued to bridge the gap between the Defense Ministry and the entrepreneurial community.

The program, which connects the ministry’s challenges with innovative solutions, “fosters small and agile companies to develop defense technologies,” said a ministry statement.

“It provides start-ups with techno-operational support from DDR&D and professional guidance from iHLS and SOSA.” The Israel Homeland Security and SOSA accelerators have already been the main civilian sector bridge for the Shin Bet’s (Israel Security Agency) own start-up initiative in the Ashkelon-southern region in recent years.

All of this leads to vital assistance in “business development, market penetration, networking, and investments,” said a ministry statement.

Selected start-ups participate in a four to six-month pilot program, and the start-ups that succeed during the pilot program stage then advance to system integration while retaining their intellectual property.