Israel is backing two venture capital funds through state guarantees to nurture the next generation of local advanced defense technologies and strengthen the country’s security independence and tactical superiority on the battlefield.

Following a bidding process, the Finance Ministry, along with the Defense Ministry’s Directorate of Defense Research and Development (DDR&D), selected venture capital funds Adir Capital and Sling Capital to unlock private investment in critical military and dual-use technologies and help cement Israel’s position as a global hub for defense innovation.

The initiative comes as NATO members pledged last year to ramp up defense-related spending to five percent of GDP, and as some European governments are canceling arms deals with major Israeli defense contractors and are seeking sanctions on Jerusalem due to the war against the Hamas terror group in Gaza.

“The establishment of the funds marks a central milestone in the Defense Ministry’s strategy to transform the unique Israeli ecosystem — connecting the Defense Ministry and the IDF with defense industries and local entrepreneurship — into a global leader in the defense tech industry,” said Defense Ministry Director General Amir Baram.

As part of the initiative Adir Capital, managed by Idan Financial Instruments, and Sling Capital, led by Giza Venture Capital, the winners of the tender, will each receive NIS 100 million ($33 million) in state guarantees. Adir has recruited Maj. Gen. (res.) Mishel Yanko as chairman of the state-backed fund and IDF veteran Maj. Gen. (res.) Yaakov Ayish as a strategic adviser. Yanko previously served as head of the IDF Technology and Logistics Directorate during the Israel-Hamas war.

State guarantees protect investors against the risk of losses and serve as incentives to encourage investment in new advanced defense technologies, which are considered high-risk.

The joint initiative........

© The Times of Israel