VC Survey 2026
“This is now the start of the Kennedy era for the Israeli tech ecosystem”
Varana Capital co-founder and CIO Ezra Gardner joins CTech to discuss the acceleration of the U.S.-Israel tech partnership, why he predicts capital will move away from cyber, and the most likely utility of dual-use tech, as part of the VC Survey 2026: The Next Leap.
“The future does not repeat the past, but it often rhymes,” says Ezra Gardner, co-founder and CIO at Varana Capital. Gardner sees the remarkable performance under extraordinary conditions demonstrated by the Israeli tech ecosystem over the past few years as a historical analogue for global investors. “It is now demonstrably battle-tested,” he explains. As a result, Gardner believes that "this is now the start of the Kennedy era for the Israeli tech ecosystem. We survived and now we will thrive! Camelot has arrived.”
Following the turbulence of recent years and the stabilization of 2025, the Israeli tech ecosystem is entering a new era: The Next Leap. Gardner joined CTech to share insights for its VC Survey 2026, which invites prominent investors to discuss the topics, trends, and “leaps” expected in the year ahead.
"Capital flows like water down a riverbed, in the most natural and useful path," Gardner explains. He argues that the future for this path won't be in cybersecurity. "It’s not natural to add 100 more hamburger franchises to the world." By 2030, Gardner predicts that Israel's next export engine will be “advanced industrial deep tech-spanning AI infrastructure, energy systems, and core hardware components.”
You can read the entire interview below:
Fund ID
Name of Fund: Varana Capital
Total Assets Under Management (AUM): >$1B
Partners/Managers: Ezra Gradner (co-founder and CIO), Philip Broenniman (co-founder and managing partner)
Notable Portfolio Companies (Active): NeuReality, Addionics, Arbe Robotics, Arcuro Medical, BeeHero, Craft.io, CustoMed, Freightos, Raft, Terrestrial Energy, TriEye, Stamm Bio, Sakuu
Notable Exits: Precision Castparts, Byrna
The Global Leap: How is the 'Israeli Tech' asset class being rebranded to global LPs in 2026? Are we shifting the narrative from 'Innovation' to 'Extreme Resilience'?
It is neither innovation nor resilience alone – it is the combination of both, alongside a more fundamental reality that should not come as a surprise. The innovation narrative cannot be dismissed, particularly after it was reinforced by Israel’s ability to innovate faster, at greater scale, and under extraordinary conditions during the war, even as 10-50% of startup employees were called up for reserve duty.
Yes, it certainly felt like “Extreme Resilience” when for months in the business lounge of the Sheraton it was just me, a couple TV reporters from the US and a couple Generals from the same.
Still, what was often described as “extreme resilience” reflects a deeper structural strength: the capacity to sustain technological progress amid prolonged uncertainty and security pressure. This period has further stress-tested Israel’s technology ecosystem – not for the first time, but at an unprecedented level of intensity.
As a result, the Israeli tech asset class is stronger and more valuable than ever. It is now demonstrably battle-tested. Investors (me included) naturally rely on historical analogies – the future does not repeat the past, but it often rhymes. In this sense, the ecosystem is entering a new phase of maturation, where survival gives way to renewed growth and opportunity.
This is now the start of the Kennedy era for the Israeli tech ecosystem. We survived and now we will thrive! Camelot has arrived for the Israeli tech ecosystem. Failing to recognize this shift is not a risk but a missed opportunity.
The Deep Tech Leap: With the rising focus on hardware-heavy sectors (Defense, Climate, Quantum), is the Israeli VC model adapted to fund high-CAPEX ventures?
Capital flows like water down a riverbed, in the most natural and useful path. If you believe that this “water” we call capital is trying to navigate this riverbed by chasing cyber security, you will be proven wrong. It’s not natural to add 100 more hamburger franchises to the world. What’s more natural is to generate more carbon free energy, more compute, more specialized biotechnology. Yes, this requires capital. But it is efficient. Why? Because a small nuclear reactor or a quantum computer capable of understanding protein folding and molecule attachment will feed us for eons.
The Sovereign Leap: Have the geopolitical lessons of recent years pushed Israeli startups to build independent, 'sovereign' tech stacks to reduce reliance on global platforms?
Short answer: yes. Israel is not operating in isolation. For decades, it has served as one of the United States’ most strategic innovation and security partners — a relationship built on deep technological interdependence rather than parallel sovereignty.
In that context, the notion of “independent sovereign tech stacks” is better understood as a symbiotic U.S.-Israel ecosystem, where capabilities, capital, talent, and infrastructure are jointly developed. The historical decision by Intel to build its first Western semiconductor fabrication facility in Israel (following initial expansion in Asia) is a clear example of this dynamic.
That partnership is now accelerating. Significant investments are being made across advanced manufacturing, data infrastructure, and energy systems. As traditional energy sources face long-term constraints, carbon-neutral solutions and next-generation power infrastructure are becoming central to this strategy.
Israel brings the necessary ingredients – engineering depth, system-level thinking, and proven execution – to support resilient, locally anchored data centers and infrastructure built within this allied framework.
The Dual-Use Leap: Israel has mastered Defense Tech. Which civilian industry (e.g., Construction, Agri, Logistics) will see the biggest disruption from adapting these battle-tested technologies?
Construction and industrial infrastructure will see the most immediate and structural disruption from Israel’s defense-tested technologies.
Construction is one of the largest, least digitized, and least productive industries in the global economy, and therefore one of the most exposed to change. The capabilities Israel perfected in defense-autonomy, real-time sensing, edge decision-making, and resilience in imperfect conditions translate directly to construction sites and large infrastructure projects, where uncertainty, safety, and cost overruns are the norm. These are not software tweaks; they change how physical systems are built, monitored, and operated.
Agriculture is the next force multiplier. Here, dual-use technology doesn’t replace the farmer, it codifies and scales the farmer’s expertise. We’re already seeing defence-grade AI, sensing, and autonomy migrate into logistics, infrastructure, and industrial environments, from autonomous routing and inventory optimization to resilient communications and edge intelligence across distributed assets. These technologies are becoming less of a "nice to have" and more mission-critical in a world defined by geopolitical shocks, labor shortages, and fragile supply chains.
The Next Engine: Cybersecurity has been Israel's primary export engine for a decade. Which domain is best positioned to take the lead by 2030?
Advanced industrial deep tech-spanning AI infrastructure, energy systems, and core hardware components will be Israel’s next export engine by 2030.
Cybersecurity remains foundational, but Israel’s next wave of value creation is coming from deep tech that delivers measurable cost and performance breakthroughs – “more for less.” That is where Israel has a structural advantage, and where global demand is accelerating.
We’re already seeing this in core building blocks: electric motors, batteries, compute, networking, energy, and aerospace systems. Beyond consumer trends, these are infrastructure technologies where engineering improvements translate into outsized economic and strategic impact. Whether in mobility, energy, satellites, data centers, or defense, the same logic applies: lower cost, higher efficiency, and scalable deployment.
This is also where dual-use becomes a feature. Defense and civilian markets increasingly converge around the same requirements: resilience, efficiency, and affordability at scale. Israel excels at building systems that work under extreme constraints, and those capabilities are now migrating directly into global industrial and commercial markets.
By 2030, Israel’s leading exports won’t just be cyber software, but physical and computational infrastructure – the engines powering AI, electrification, energy transition, and modern defense. These are the companies best positioned to scale globally and access public markets as that window reopens.
Finally, what are 2-3 startups that, in your opinion, are likely to make a leap forward in 2026?
From Varana Capital’s portfolio:
1. NeuReality builds purpose-built AI infrastructure focused on inference, addressing a core bottleneck driven by CPUs and networking rather than GPUs. Founded by veterans of Mellanox, Intel and Marvell and the high-performance networking ecosystem. Winning in AI infrastructure takes persistence and execution. NeuReality has demonstrated both. With the AI-Super NIC and Inference Serving Stack now in market, the company enters 2026 with real traction, engagement with a tier-one player advances.
2. Addionics is another company to watch this year. Addionics develops chemistry-agnostic, drop-in 3D current collectors that integrate into existing battery manufacturing lines, enabling higher performance without disrupting production. Batteries have become central to humanity’s technological progress, from space and defense to AI and robotics. Addionics’ technology represents a meaningful leap forward for the battery industry, and it is already being adopted by leading global players. I can only say we may soon see Addionics’ technology powering a satellite in space – a remarkable milestone in one of the fastest-growing and most demanding industries.
3. CustoMED enables surgeons to design fully personalized orthopedic implants in minutes, combining software, precision engineering, and additive manufacturing. CustoMED enters 2026 with over 4,500 pre-sold cases, a substantial volume that validates the massive market need. FDA approval in 2026 will be the final trigger to fulfill this demand, proving that mass customization is a scalable commercial reality.
