International VC Survey 2026
“Every conflict, every cycle of adversity, seems to produce a hungrier generation of Israeli founders”
Index Ventures partner Juriaan Duizendstraal joined CTech for its 2026 International VC Survey.
“Israel isn't going to out-spend the hyperscalers on foundation [AI] models, and the smart founders aren't trying to. They're going where capital intensity isn't the moat,” said Index Ventures partner Juriaan Duizendstraal.
CTech reached out to Index Ventures to explore the evolving "remote" VC-founder relationship and the specific strategic markers that attract global giants to the Israeli market in 2026.
With AI shifting from copilots toward more autonomous systems, Duizendstraal sees Israeli startups establishing a defensible edge in building effective security and infrastructure.
“Defensibility lies in the infrastructure layer beneath autonomous systems — the safety stack, the orchestration layer, and the verification tooling. That maps directly onto Israeli strengths: adversarial thinking honed in 8200, formal methods from decades of mission-critical work, and a systems engineering culture that treats reliability as the product rather than a feature,” he said.
“The Israeli edge here isn't accidental. When the same engineers who hardened cloud, identity, and endpoint over the last fifteen years turn their attention to autonomous systems, you get a generational head start on a problem the rest of the market is only beginning to name. The next category-defining companies in AI won't be built in the agent layer. They'll be built in the substrate underneath it.”
You can read the entire interview below.
ID CARD
Fund Name: Index Ventures
Total Assets Under Management: (Undisclosed)
Notable Portfolio Companies: Simile, Wonderful, Parallel Web Systems, Revolut, Remote, Alan, Frame, Fireworks, Temporal, Clickhouse
Notable Exits: Wiz, Datadog, Scale AI, Robinhood, Adyen
As we move through Q1 2026, are you seeing early signs of the IPO window reopening for Israeli tech, or does M&A remain the more realistic exit path in the near term? What indicators are you watching most closely?
The IPO window isn't open as it once was — but it's not completely shut either. And the best companies don't wait for the window. A truly exceptional business can go public in almost any market; what changes is the valuation, not the outcome. The companies that will IPO well in 2027 are making that decision today. Clearly, companies in the AI ecosystem have the most opportunity now. Private and public valuations continue to soar.
We are closely watching those building new models for industries, building compute and infrastructure, changing energy needs, or reshaping hardware to automate industrials.
M&A may be the dominant exit story through mid-2026, and strategic acquirers — especially in cybersecurity and enterprise software — are very active. But the best founders aren't treating acquisition as their plan A. They're using M&A interest as leverage while they prepare for a public path.
Post-market correction, which performance metric is actually driving conviction in Israeli companies right now? Are investors prioritizing something specific to the current cycle?
One metric we focus on is Net Revenue Retention. Are the platform's customers investing more? In a bull market, ARR growth could hide almost anything. Post-correction, NRR indicates whether customers are actually embedding the product and expanding its usage.
We're also watching the payback period — not in a theoretical sense, but in terms of how quickly a company recoups its go-to-market spend in an environment where buyers are scrutinizing every line of their budget. The companies winning right now aren't growing the fastest. They're growing the most efficiently.
Beyond the numbers, what we really care about is the quality of customers. Are they lighthouse, innovative buyers that genuinely represent the startup's ICP? And are they the kind of reference customer that will pull similar companies into the solution? One marquee logo that anchors a category is worth more than ten logos that don't compound. In this cycle, the best signal isn't just that customers are paying — it's that they're the customers everyone else in their segment is watching.
How are you currently pricing geopolitical and operational risk when evaluating Israeli companies?
The risk is real, and we take it seriously — but the way we underwrite it has shifted. We underwrite the company, not the country. What we evaluate instead is how the founding team has actually performed under pressure, not as a proxy for resilience but as direct evidence of it. Founders who kept shipping, closing, and recruiting through the last two years have already been stress-tested in ways their valuations don't yet reflect.
There's also a pattern worth naming. Every conflict, every cycle of adversity, seems to produce a hungrier generation of Israeli founders. There's a chip on the shoulder — a need to prove that nothing stops Israeli innovation — and it shows up in the data. Records for company size, revenue scale, time-to-milestone, and exit velocity keep getting broken year after year, often in the periods that look hardest from the outside. The ecosystem doesn't just absorb shocks. It compounds through them.
So when we price risk, we hold two things at once: the operational reality on the ground and the historical pattern that Israeli founders tend to emerge from these moments stronger, faster, and with sharper conviction than the cohort before them. More often than not, the risk-adjusted opportunity is better than the perceived risk implies.
For foreign investors specifically, what has been the most persistent friction point when deploying capital into Israel recently? Is it regulatory clarity, talent mobility, capital structure, or something else?
The friction that comes up most often isn't regulatory or structural — those are solvable. It's talent mobility and what that means for delivery commitments to U.S. enterprise customers.
If a Fortune 500 company is signing a multi-year contract, they're asking hard questions about leadership continuity and where the team will be based in the long term. That conversation has gotten more complicated. The founders navigating it best aren't reacting to those questions — they've built distributed team models with operational redundancy before they needed it.
Israeli founders are often associated with speed and adaptability. In the current environment, does that still translate into an advantage, or are you seeing stronger outcomes from teams that skew toward operational discipline and predictability?
It depends on the stage, but speed is still a foundational advantage — and in the AI era, it's becoming more valuable, not less.
Israeli founders move fast because everything in Israel moves fast. The pace starts early: in the army, people are making decisions in seconds or minutes that affect lives, careers, and missions. That muscle doesn't switch off — it carries directly into how Israeli teams operate as founders. High urgency is the default setting, not something you have to coach into the culture. In a market where the AI landscape is shifting month to month and falling behind on a model release or a new attack vector isn't recoverable, speed-to-decision is one of the clearest edges an early team can have.
That said, there's real bifurcation at Series B and beyond. The companies scaling successfully into U.S. enterprise have evolved out of always-be-adapting mode. From product development to sales motion to customer relationships, operational discipline is what separates the ones that compound from the ones that stall. The best Israeli founders today aren't choosing between speed and discipline — they're combining both, because their customers are CTOs/CIOs/CISOs and engineering leaders who demand predictability. Early speed and adaptability get you to the table. Discipline earns you the seat. The rare teams that hold onto both are the ones building the next category leaders.
Looking at deal flow today, where do you see the largest disconnect between perceived risk and actual opportunity in the Israeli market?
The biggest disconnect is in the AI infrastructure built by Israeli teams. The market has internalized the idea that AI matters and that Israel is strong in security, but it's still pricing Israeli AI companies through a cybersecurity lens. That frame is outdated.
What we're seeing in deal flow is a generation of Israeli founders building the substrate underneath autonomous systems — inference orchestration, data plane optimization, verification, and observability. The technical depth is as good as anything we see in the U.S., often with sharper traction and better unit economics, but at meaningfully lower entry prices because the "Israel = cybersecurity" label is doing real work in how generalist investors benchmark these companies.
Layer in that the founder pool itself has been quietly upgraded — operators from Wiz, Armis, and Monday now starting their second or third companies — and you have a market that's double-counting risk: a country discount on top of an underestimated founder quality. That's where we think the best returns of this cycle get made.
