Israel Selects Two Venture Capital Funds for Defense Tech Investment
Israel's Ministries of Finance and Defense have chosen Adir Capital and Selling Capital to establish venture capital funds focused on defense technology startups. Adir Capital, which includes Barak Capital as a partner, and Selling Capital, affiliated with Giza, were selected through a tender process managed by the Finance Ministry's Accountant General and the Defense Ministry's Directorate of Research and Development.
The state-backed funds will aim to invest in early-stage companies developing advanced defense technologies, particularly those requiring extensive research, high production costs, and significant upfront investment before generating revenue. A key objective is to facilitate capital raising for these companies, which often struggle due to long development cycles, high production expenses, and the complexities of obtaining approvals and orders.
The initiative also seeks to bolster Israel's technological and manufacturing independence, reducing reliance on foreign suppliers. The Finance Ministry stated that the need for domestic production and stable supply chains has become more apparent during the recent war and amidst global geopolitical shifts. The state's guarantee is intended to mitigate investor risk and encourage private capital flow into the sector.
Following their selection, Adir Capital and Selling Capital must now secure private investors before commencing actual investments. Finance Ministry Director General Israel Malachi highlighted the use of smart financial tools to channel private capital towards national goals, emphasizing enhanced investment in advanced technologies, technological independence, and support for Israeli entrepreneurs. Defense Ministry Director General Amir Yaron stressed the importance of increased R&D investment to maintain Israel's strategic qualitative edge and develop future technological surprises.
Officials from both ministries, including Accountant General Michal Abadi-Boiangiu and Head of MAFAT Dani Gold, underscored the collaboration between civilian and defense sectors to accelerate breakthrough technologies, strengthen national resilience, and support local innovation and critical supply chains.
