Israeli defense-tech investment set to nearly triple to $1 billion in 2026

Investment in Israel's defense-tech sector is expected to nearly triple to $1 billion in 2026, up from $360 million in 2025, driven by rising global defense spending and demand for new military technologies. The forecast was presented by Eitan Mandel at a conference during Israeli Hi-Tech Week.

Investment in Israel's defense-tech sector is expected to nearly triple this year, reaching approximately $1 billion compared with $360 million in 2025, as rising global defense spending and demand for new military technologies draw investors to the industry. The forecast was presented by Eitan Mandel, head of the Defense Industries Division at the Manufacturers Association of Israel, at the 'Defense Tech: The Next Frontline of Israeli Hi-Tech' conference held during Israeli Hi-Tech Week. Mandel said Israel's recent wars accelerated the development of military technologies and shortened the time it takes to move products from concept to operational use. He noted that before October 7, the development cycle in Israel averaged around two years, compared with eight to 10 years in the United States, and that process now takes weeks in some cases. Lital Leshem, founding partner and managing director of Protego Ventures, said global defense spending is expected to reach approximately $3 trillion, and identified three main factors driving the expansion: the war in Ukraine, rising defense budgets, and changes in regulation and procurement. Peleg Cohen, head of start-ups at MAFAT, said the directorate's portfolio includes approximately 320 to 350 companies, and that MAFAT issued procurement orders worth approximately NIS 1 billion in the first half of 2026, almost double the amount during the same period last year. The article notes that funding remains concentrated among a relatively small number of companies, leaving smaller startups struggling to secure investment.