DDR&D’s Startup Insights– Q4 2024 Review
As we conclude 2024, we present the latest insights on Israel’s defense-tech and startup ecosystem based on the Q4 2024 Startup Assessment Report. The past year has been transformative, marked by increased engagement with startups, new funding initiatives, and significant contributions to national security efforts.
Key Highlights from 2024
→ Boom in Startups working with DDR&D
The number of startups collaborating with Mafat (DDR&D) and the Ministry of Defense reached 299, a 72% increase since the end of 2023. These companies operate within various innovation programs, including INNOFENSE (DDR&D Dual Use Accelerator) and direct collaborations with the defense sector.
→ Record Funding and Contracts
Over ₪1.22 billion ($320M) in contracts were awarded to startups, alongside an additional ₪317 million ($83M) in defense-related projects. From the outbreak of the Iron Swords War until December 31, 2024, 101 startups and small companies received orders totaling approximately 782 million ILS, including 6 startups that are alumni of INNOFENSE. Of this amount, approximately 317 million ILS was allocated in 2024.
→ Early-Stage Startups Take the Lead
According to DDR&D data, 62% of all startups contracted by the Israeli Ministry of Defense in 2024 are at the SEED or PRE-SEED stage.
- 20% have completed their first funding round
- 10% have completed a second or third round
- 8% have completed an EXIT or IPO
→ Defense Startups’ Pivotal Role in National Security
The ongoing ‘Iron Swords’ war has demonstrated the strategic value of startups. More than 101 startups played a direct role in the war effort, receiving contracts to develop critical defense technologies. These contracts included advancements in AI, cybersecurity, drone technology, and autonomous defense systems.
→ Open Calls for Startups
In 2024, seven open calls for innovation were issued, attracting 150 applications from initiatives aiming to tackle national security challenges. As a result, 15 startups began working directly with DDR&D.. This demonstrates the growing importance of defense startups in shaping Israel’s technological landscape.
→ Growth of the ‘Green Lane’ Pathway
The ‘Green Lane’ fast-track program for defense startups grew to 207 companies, with 61 new companies joining in 2024. This program accelerates procurement processes and reduces bureaucratic barriers for innovative defense solutions.
→ Breakthrough Innovation in Multiple Sectors
Startups in autonomous systems, AI, cybersecurity, sensors, and life sciences saw an increase in funding and projects. Significant funding were made in AI-based surveillance, autonomous drone technology, and digital battlefield intelligence solutions.
→ 2 New Accelerator for startups
Innotal Accelerator -DDR&D and ATAL (Technological and Logistics Directorate) Innovation Program – Operated by the Israeli Innovation Institute, this program integrates groundbreaking Israeli technologies into the IDF via ATAL, focusing on fields like logistics, transportation, medicine, food and more. The first cohort welcomed 10 new startups, with the program set to expand to 20 startups in 2025.
DRISHTI Accelerator – A dual-use technology program helping MAFAT-backed startups enter India's civilian and defense ecosystems, in partnership with T-Hub, India’s largest startup accelerator. The first cohort welcomed 15 startups.
Strategic Takeaways for 2025
Speed and Agility Are Key
The fast adoption of startup solutions during the war highlighted the need for rapid R&D and deployment. We must continue streamlining bureaucratic processes to ensure innovation reaches operational use swiftly.
Global Partnerships Matter - Government-To-Government
During 2024, orders were issued under G2G projects totaling approximately 293.7 million ILS (equivalent to ~81 million USD) for 17 startups and small companies.Ecosystem Development
Mafat continues to support accelerator programs in Israel and worldwide, including Drishti, INNOFENSE and Innotal, ensuring the steady growth of Israel’s defense-tech ecosystem.
Looking Ahead into 2025
The coming year will focus on:
1. Strengthening public-private partnerships
2. Expanding international funding and collaborations
3. Accelerating adoption of dual-use technologies
4. Optimizing and expanding the ‘One-Stop Shop’ model to create a seamless, efficient, and structured process for startups engaging with MAFAT, ensuring better access to resources, guidance, and integration opportunities
5. New R&D Funding Mechanisms
The Israeli startup ecosystem is thriving, proving its resilience and capacity to drive technological advancements in national security. We look forward to another year of growth, impact, and bold innovation.
For more details or to get involved, reach out to us.
Best regards,
Mafat Innovation & Research Team
Israel's defense startup ecosystem is showing how innovation can thrive even in challenging times. The 72% jump in collaborations is impressive especially with so many early stage startups in the mix.
Is this boom mainly because of fast track programs like Green Lane or the urgent need for new tech during the Iron Swords war? Also curious how global partnerships like DRISHTI will shape the future of defense innovation?