After Line5: The Second Wave of Israeli Defense Founders

The first wave of post-2020 Israeli defense startups — Line5, Smart Shooter, D-Fend Solutions, Sentrycs — established the category. They proved that the Israeli founder pipeline that built the country's commercial cyber giants could also build defense companies at venture pace.

The second wave is now visible. Driven by post-October 7 demand, the Sovereignty Doctrine, MAFAT's expanded startup integration, and a returnee cohort of post-exit founders building third-act companies, the cohort of Israeli defense-tech startups now operating at Series A scale or above has grown to publicly reported figures in the dozens.

The Olam tracks the cohort.

The defining characteristics

Three structural patterns mark the second wave.

One — cross-pollination with the commercial tech sector. Multiple second-wave founders previously built or exited commercial cyber, AI, or robotics companies before pivoting into defense. The Returnee Cohort, tracked separately on The Olam, is publicly reported as substantially overlapping with second-wave defense founders.

Two — dual-use product structures. Most second-wave companies publicly position for both defense and commercial buyers. Counter-UAS technology that protects an airport sells to civilian aviation and to military bases. AI tactical fire-control software designed for IDF squads scales into commercial security applications. This dual-use posture is widely reported as a structural feature, not a marketing strategy.

Three — MAFAT integration from day one. The Defense Ministry's Directorate of Defense Research & Development (MAFAT) is publicly reported to participate in the second wave's seed and Series A capital structures at materially higher rates than was true a decade ago. The MAFAT allocation, covered elsewhere on The Olam, sits inside this trend.

The cohort

A non-exhaustive map of publicly reported second-wave Israeli defense and dual-use founders includes:

Xtend — Tactical indoor/outdoor drones for police, military, and SOF customers. Publicly reported U.S. SOCOM and IDF deployments. Backed by Chartered Group, IDC Venture, and other reported investors.

Robotican — Counter-UAS interceptor-drone platforms. Publicly reported as adopted by multiple Western military programs.

SpearUAV — Encapsulated launched-effect drone systems for tactical reconnaissance and engagement. Publicly reported as integrated into multiple Western military programs.

Skylock Systems — Multi-layered counter-drone defense. Publicly reported as adopted in airport and critical-infrastructure protection programs internationally.

Carbyne — Critical-communications platform spanning public safety and defense. Backed by reported investors including Founders Fund.

Asio Technologies — Optical sighting and fire-control. Publicly reported as integrated across multiple infantry-weapon platforms.

IRP Systems — Electric propulsion for tactical vehicles. Dual-use posture.

UVision — Loitering munitions, with the Hero family of platforms publicly reported as adopted by multiple Western militaries.

Adjacent companies operate at the ISR, automotive-defense crossover, and simulation layers.

The capital structure

The Israeli defense-tech venture market is publicly reported as having raised substantially more capital in 2024 and 2025 than in any prior period. Specialist defense-tech VCs have emerged — including dedicated funds at Cyberstarts (with defense crossover), Hetz Ventures, Disruptive AI, Awz Ventures, and adjacent. International defense-tech funds — Shield Capital, Snowpoint Ventures, and the broader U.S. defense-tech VC cohort — have publicly reported active Israeli portfolios.

The structural conclusion: the Israeli defense-tech venture market now exists as a separately-priced asset class, distinct from the commercial Israeli tech market that anchored the prior decade.

What comes next

Three predictions visible from the public capital flows.

One — at least one second-wave Israeli defense-tech company is widely reported as likely to reach unicorn-scale private valuation before year-end 2026.

Two — strategic acquisitions by the U.S. defense primes (Lockheed Martin, Raytheon, Northrop Grumman, General Dynamics, L3Harris) and by the U.S. defense-tech leaders (Anduril, Shield AI, Palantir) are publicly reported as actively in pipeline.

Three — the line between second-wave defense-tech and commercial cyber will continue to blur, as the same operator pipeline staffs both sides.

The Olam covers the founders, capital, and acquisition queue across the cohort.