Israeli Wartime Innovation Spurs Global Demand for Defense Technology

Out of the chaos of war, Israel’s entrepreneurial spirit has ignited a wave of innovation that is reshaping the global defense industry. As the Jewish state battles threats on multiple fronts, Israeli army reservists have transformed their real-time battlefield experiences into game-changing technologies drawing attention and investment from across the world.

One such innovation is SkyHoop, a startup born on the front lines. Created by 36-year-old reservist Zach Bergerson, the system alerts troops to incoming aerial threats using mobile phone technology. Developed after witnessing the dangers posed by enemy drones, SkyHoop has already begun pilot programs in Ukraine and is in talks for a trial with the U.S. Defense Department.

This surge in wartime ingenuity is not isolated. According to Startup Nation Central, over a third of Israel's defense tech startups have been founded since Hamas’s October 7 massacre launched the ongoing Gaza war. The demand for battle-tested, soldier-driven solutions has skyrocketed particularly in Western militaries preparing for next-generation warfare.

The success of Israel’s aerial defense systems during its 12-day conflict with Iran in June 2025 only amplified this trend. The Israeli Defense Ministry reported that 86% of Iran’s ballistic missiles were intercepted, showcasing the reliability and strength of Israel’s defense innovations.

Investment is pouring in. Once hesitant, major U.S. venture capital firms are now backing Israeli defense startups. Israeli investors are following suit. In December, reservist Lital Leshem co-founded Protego Ventures, a $100 million fund dedicated to nurturing early-stage defense companies. Leshem, who has evaluated over 160 firms, expects to back at least four by year’s end.

“These companies are not just inventing they’re solving problems they lived through in combat,” Leshem noted.

Israeli defense exports hit a record $14.8 billion in 2024, with more than half of those sales going to European countries a notable jump from 35% in 2023. Europe's military modernization, spurred by the war in Ukraine and bolstered by a new NATO defense spending plan, is creating vast new markets for Israeli defense firms.

Despite growing political pressure and calls from some quarters to boycott Israeli arms, performance still drives demand. “In the end, they want to buy the best product possible,” said Reserve Brigadier General Yair Kulas, who oversees international defense cooperation for Israel.

Kulas acknowledged the challenges posed by attempts to delegitimize Israel. “Our innovation is groundbreaking and world-class, but the backlash is real,” he said. The political climate may affect future sales, but for now, demand remains strong.

Israeli reservists are leading what some see as a new tech revolution comparable to the mobile technology boom of two decades ago. As Avi Hasson of Startup Nation Central put it, “We are now in a different world.”

Israel’s major defense firms Elbit, Rafael, and Israel Aerospace Industries are taking note. Whether through acquisitions or accelerated R&D, they’re poised to integrate this flood of grassroots innovation and scale it for global markets.

From battlefield innovation to global partnerships, Israel is once again proving its unmatched ability to turn adversity into advancement.

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