New fund to invest in young Israeli defense-tech cos

Israeli defense-tech startups growing assault drones, defenses towards fiber-optic drones, and munitions of varied varieties have change into the pleasure of the Israeli trade because the preventing dies down. To date, nevertheless they’ve primarily international traders: funds resembling Lux Capital, Sequoia, and Peter Thiel’s Founders Fund have invested in outstanding corporations within the sector resembling Kela and Covenant. Few Israeli traders have invested in them, apart from new, small funds resembling Protego Ventures, Kinetica Ventures, Aurelius Capital, and 10D. In response to analysis agency IVC, solely 0.5% of the entire quantity of capital invested in Israeli startups has gone to Israeli defense-tech corporations.

A brand new Israeli enterprise capital targeted on the sector, based by Israelis who beforehand managed household places of work, was unveiled yesterday. To date it has made 5 investments below the radar in younger Israeli corporations. The fund, Stratos Ventures, has raised $50 million out of a goal $80 million from an anchor investor – a British monetary establishment – and former senior figures in protection institutions within the US, Latin America, and India.

The fund guarantees entrepreneurs contemplating founding corporations within the sector, and those that have already taken their first steps, entry to the US Division of Warfare, the US Protection Superior Analysis Tasks Company (DARPA), US Central Command (Centcom), and personal US protection funds. The fund has a partnership with startup accelerator The LAB Miami, among the many founders of which is Israeli Ayal Stern.

Among the many fund’s companions and advisors are a former head of the CIA who has not been named, Lieutenant Basic (ret.) Michael Barbero, a four-star normal within the US Military who commanded the legendary one hundred and first Airborne Division, and Theo Williams, former head of portfolio growth at Salesforce Ventures.

Corporations with an Israeli connection

The fund was based by three Israelis working in protection funding in household places of work and funds. Rotem Yehuda Kakon served in elite IDF expertise items and headed Consensus Enterprise Group, a UK household workplace managing $1.2 billion in belongings. He was one of many early traders in protection fund AWZ and in Israeli emergency communications platform Carbyne, which was bought to US firm Axon for $625 million. Between 2014 and 2019 Kakon was bureau chief for the minister of the financial system and the minister of environmental safety. He presently serves as a director of Xenia Enterprise Capital and Earth and Past Ventures.

Kakon was joined by Aviad Grinfeld, an skilled CFO and former CEO of Avnon Holdings, which additionally invested in protection corporations, and Daniel Fouzailov, a former associate in Paz Capital, an Israeli household workplace.

Stratos focuses on funding in corporations within the pre-seed to seed levels with Israeli founders or a considerable connection to Israel. The intention is to take a position $2-4 million every in 15-20 corporations.

Printed by Globes, Israel enterprise information – en.globes.co.il – on June 25, 2026.

© Copyright of Globes Writer Itonut (1983) Ltd., 2026.