James Spiro

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When Keir Starmer stood outside Downing Street to announce his resignation, he listed “ripping out the poison of antisemitism” from the Labour Party as one of the defining achievements of his leadership. It was a claim that likely carried personal...

What began as a military failure has become a catalyst for one of the biggest transformations in the country's technology ecosystem in decades.

James Spiro Jun 29, 2026 Posted 1 hr ago at 8: 55 AM She was six months pregnant when the call came. Lital Leshem, co-founder of Protego Ventures , an Israel-based fund investing in early-growth companies driving innovation in critical areas of defense technology, deployed south to the IDF Southern Command's Central War Room and watched Oct. 7, 2023, unfold in real time. “We were exposed,” she told JNS. “Not because of a lack of bravery or technology, but because the pipeline between innovation and operational reality was broken.” That gap between what Israel's defense establishment could build and what it could actually deploy in a crisis had been widening for years. Israel's high-tech border fence surrounding Gaza served as both a physical and electronic barrier, standing as the embodiment of Israel's technology-first security doctrine. But in reality, the result was merely an illusion of control with a hidden single point of failure. In the early hours of Oct. 7, Hamas terrorists used bulldozers and bombs to breach the barriers in several areas, having first used drones to destroy the communication towers that connected the sensors to the control centers. When technology became doctrine Israel's increased reliance on world-leading technical intelligence capabilities, including AI associated with Unit 8200, had seemingly created a sense of security that reduced reliance on human intelligence. The assumption that Hamas was deterred had almost become a doctrine. This shift in priorities from traditional intelligence analysis to market-ready technological solutions came at a cost, as some Israeli military officials have since acknowledged , “makes you forget the traditional intelligence methods.” What's more, when female soldiers monitoring border cameras reported unusual Hamas training activity in the months before the attack, their warnings were dismissed by senior commanders who believed deterrence was holding. What followed on Oct. 7 was a fundamental rewiring of how Israel builds, funds, and deploys technology. An Israeli defense official who spoke to JNS on the condition of anonymity described the scale of the institutional shift. Before the war, the Ministry worked with approximately 130 startups. Today, that number exceeds 300. In all of 2025, roughly $1 billion in private capital flowed into startups working with the Ministry of Defense —and so far in 2026, that figure was already approaching $3 billion. “We were working to open up the market for competition and for newcomers that might have advantages in human talent and in bringing innovation faster to the battlefield,” the Israeli defense official said. “That really started happening after Oct. 7.” The return of operational experience Startup Nation Central began mapping Israel's defense-tech sector around 18 months ago, starting with approximately 150 companies, with the number rising to almost 350 today. In other cases, existing startups pivoted into defense, repurposing civilian technologies for real-time military use. In 2025, Israel's defense-tech sector transitioned from a niche field into an emerging industry regarded as a strategic asset. Two companies illustrate the shift. Kela Technologies, a counter-UAS startup founded after the war, has raised more than $200 million and secured significant MoD contracts in drone detection and early warning using AI-driven sensor fusion to minimize false detections in real time. The second firm, eyesAtop, addresses a different gap: autonomous drone deployment for battlefield situational awareness. The defense official described both as emblematic of a compressed feedback loop that didn't exist before Oct. 7. “It used to be that for an entrepreneur to know what was needed in the battlefield, he had to sit through long discussions to better understand operational needs,” the official told JNS. “Currently, these people are coming back from the battlefield, and they know better than anyone what is needed.” The capital behind the doctrine That shift has not been lost on investors. Lital Leshem and her co-founder Lee Moser started Protego Ventures three months after Oct. 7, while still on reserve duty with the Gaza Division, following an advocacy trip to Washington with a survivor from Kibbutz Nir Am. What they heard from senior American officials was a strategic interest in Israel and its technologies. “This wasn't about charity,” Leshem told JNS. “This was a structural opportunity that no one was properly organized to capture.” Protego invests in early-growth Israeli defense-tech companies across AI, autonomous systems, sensors, robotics, and what Leshem calls the ‘cognitive war space' that refers to decision-making, information battles, and automation for when humans get overwhelmed. “Our LPs understood this. They weren't just writing checks to donate. They wanted to future-proof Israel and the West. That's a very different investor psychology than traditional VC,” she explained. New defense VCs, led by former generals and intelligence veterans, are betting that October 7 created the conditions for Israel to become the R&D arm of Western defense technology. A new venture fund, Stratos Ventures, has raised $50 million to invest in early-stage defense-tech companies and has already completed five investments. The IDF's new five-year plan, dubbed “Hoshen,” covers 2026–2030 and will draw on a 350 billion-shekel ($117 billion) national budget aimed at restoring military readiness by focusing heavily on AI, robotics, autonomous systems, and strengthening ground combat forces. The doctrine shift the Ministry official described has a name: “Blue-White Strategy”. It is the MoD's formal commitment to producing critical components like munitions, missiles, and interceptors domestically without dependence on foreign suppliers. The lesson came from experience after the country faced weapons embargoes by European states and friction from the Biden administration over arms transfers. “We need to have both the critical raw materials and the ability to produce all relevant components for our munitions, against weapons of all types - missiles, munitions, interceptors - within our industries here in Israel,” the official said. Exporting Oct. 7 lessons to the West For Leshem, the stakes are personal in a way she finds difficult to articulate cleanly. “When I say I want to make sure Israel is never caught unprepared again, that's not a pitch line,” she said. “That's what I think about every day.” She expressed a belief that the enemies Israel has been fighting are not unique to Israel. “They are enemies of the West, liberal ideals, and the rule of law,” arguing that the technology being built from battlefield experience is directly applicable to what Western militaries will face. And the message has found an audience: the defense official described an American entrepreneur who relocated to Israel after October 7 specifically to recruit post-reserve talent and build solutions for Israeli state security, driven, in the official's words, by “basic Zionist thinking” and to build something “worthwhile to help and better defend the Israeli country.” The IDF and policymakers have begun reframing their doctrine from ‘tech-first' to ‘tech-enabled,' where human intelligence, decentralized command, and real-time adaptability sit alongside digital tools. The country's Iron Dome system has undergone more than 30 software updates during the conflict. Israel's weapons, the official believes, should no longer be described as "combat-proven"—the correct term is "combat-improved." “They've been improved by the friction and lessons learned during the war,” the official said. The phrase captures something true about what Oct. 7 set in motion. Israel did not abandon its technological confidence, per se. But it did have to reacquire it on harder terms, with clearer eyes, and among a generation of founders who learned what was missing from real-life experience following one of Israel's darkest days. “Throughout my career, I was always told that venture capital and defense are two parallel lines doomed never to meet,” Leshem concluded. “What Oct. 7 made undeniable is that they have to meet… You know exactly why you're doing it and its importance. That part doesn't change.” How do you feel about this article? Choose from the options below. (0 Ratings)

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