VC Survey 2026
“Israeli tech is increasingly positioned to lead the next wave of value creation across AI-driven verticals”
F2 Venture Capital Principal Roi Elad joins CTech to give his outlook for the Israeli high-tech sector, from the structural suitability of the local VC model for software over high-CAPEX ventures to why 2026 will be defined by execution not over hype, as part of CTech's VC Survey 2026: The Next Leap.
“The Israeli tech asset class is increasingly positioned to lead the next wave of value creation across AI-driven verticals,” says Roi Elad, principal at F2 Venture Capital. According to Elad, this outcome comes as a result of “a broader global inflection driven by LLM innovation and Israel’s long-standing strength in turning foundational technologies into real-world products.” He believes today, global LPs view Israeli tech “as a well-oiled engine capable of building large, successful companies at scale.”
Following the turbulence of recent years and the stabilization of 2025, the Israeli tech ecosystem is entering a new era: The Next Leap. Elad 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.
Elad argues that, unique to Startup Nation, “operating in a constant high-pressure environment has shaped founders who move quickly from technology to product to business, with strong execution discipline and a clear focus on outcomes.” Looking ahead, despite specialized funds emerging to support local DeepTech ventures, he argues that “the broader Israeli VC ecosystem remains structurally better suited to software and applied AI.” Overall, Elad sees 2026 as “a year defined less by hype and more by execution, focused on building resilient, meaningful companies with long‑term impact.”
You can read the entire interview below:
Fund ID
Name of Fund: F2 Venture Capital
Total Assets Under Management (AUM): $500M
Partners/Managers: Jonathan Saacks, Barak Rabinowitz, Maor Fridman, Nurit Benjamini
Notable Portfolio Companies (Active): Zero Networks, Astrix, Faye, Justt, 4M Analytics, Darrow, Sett, Regulus, Parametrix
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'?
We believe the Israeli tech asset class is increasingly positioned to lead the next wave of value creation across AI-driven verticals. This is not a short-term 2026 narrative shift, but the outcome of a broader global inflection driven by LLM innovation and Israel’s long-standing strength in turning foundational technologies into real-world products.
Israeli founders have historically excelled at application-layer execution: embedding complex technologies into specific industries, workflows, and business problems. This capability differentiates Israeli tech not only as an innovation hub, but as a builder of practical, scalable companies across multiple sectors.
At the same time, innovation and extreme resilience are complementary rather than competing narratives. Operating in a constant high-pressure environment has shaped founders who move quickly from technology to product to business, with strong execution discipline and a clear focus on outcomes.
At F2, we identified this shift early. We began focusing on AI as early as 2017, well before the current wave of attention, based on the conviction that value would be created at the company-building layer rather than through horizontal platforms. Today, that thesis is increasingly reflected in how global LPs view Israeli tech: as a well-oiled engine capable of building large, successful companies at scale.
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?
Israel has world‑class talent across deep tech domains, including defense, quantum, and semiconductors. However, as these sectors mature, they become increasingly capital‑intensive and less aligned with the traditional Israeli VC model.
Historically, Israeli venture capital has been built around relatively small funds designed to generate outsized returns, which makes it challenging to sustain meaningful ownership in high‑CAPEX companies over time.
While specialized funds are emerging, the broader Israeli VC ecosystem remains structurally better suited to software and applied AI. These sectors are more capital-efficient with faster feedback loops and clearer paths to ROI. More importantly, this is not just a matter of preference – Israeli founders and investors have developed a proven, repeatable playbook for building software companies: from go-to-market execution and infrastructure, through global scaling, to IPO-ready organizations.
This remains the dominant model, even though deep tech companies can ultimately become very large and strategically important businesses.
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?
Israeli software companies continue to build their core infrastructure on global platforms and hyperscalers such as Azure, AWS, and GCP, and this dependency extends beyond cloud infrastructure into other technology domains, including semiconductors. More recently, this reliance has deepened with the rise of AI, as many startups are built on top of third-party LLMs and external foundation models that are an integral part of their product architecture.
In practice, full technological sovereignty is neither realistic nor desirable for most Israeli startups. Modern software stacks are inherently composable, combining multiple third-party platforms, models, and services as building blocks. Rather than pursuing full independence, the emerging approach is one of managed dependency – designing architectures that balance reliance on external platforms and models with redundancy, portability, and risk mitigation.
The geopolitical lessons of recent years have increased awareness of concentration and supply-chain risks, pushing founders to think more deliberately about resilience and flexibility. However, this shift is evolutionary rather than structural: it reflects better architectural discipline and optionality, not a move toward fully sovereign tech stacks.
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?
Israel’s defense technology has long been world-class, and its spillover into civilian markets is not theoretical, it is already happening. In our view, logistics, infrastructure, and large-scale physical systems are among the civilian domains poised for the most significant disruption.
A clear example is 4M Analytics, which originated from defense and satellite-based capabilities and was adapted to map and analyze complex underground and above-ground infrastructure. Technologies initially designed for high-stakes, mission-critical environments are now being applied to civilian infrastructure, enabling governments and enterprises to better manage transportation, utilities, and construction projects at national scale.
Another example is Regulus, which applies defense-grade sensing and positioning technologies to solve fundamental challenges in autonomous systems and navigation. What began as capabilities developed for military use are now becoming essential civilian infrastructure for autonomy, robotics, and industrial applications.
The common thread across these examples is not the technology itself, but the translation layer. The real winners are companies that take defense-tested reliability, precision, and resilience and turn them into scalable civilian platforms with clear operational and economic value, rather than simply repackaging military technology for commercial markets.
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?
We believe Israeli founders are well positioned to take a global lead in applied AI across verticals, combining deep data advantages with industry‑specific expertise to build category‑defining companies.
Israeli founders are particularly well positioned to lead at this layer. In the global AI race, Israel’s advantage is not in foundational models, but in applying AI to complex, data-rich domains where efficiency, scalability, and ROI directly impact business outcomes.
At F2, we see this clearly across our portfolio. Sett applies AI to gaming economics and user engagement, transforming how studios optimize monetization and growth in a highly competitive global market. Darrow leverages AI to analyze massive legal datasets, enabling law firms to identify high-value cases and fundamentally reshaping litigation economics. Justt uses AI to automate and optimize chargeback management, turning what was once a cost center into a measurable revenue driver for global merchants.
These companies illustrate why applied AI across verticals is best positioned to lead by 2030: they address large global markets, are built around clear business value, and follow a repeatable playbook for scaling software companies into durable, category-defining businesses.
Finally, what are 2-3 startups that, in your opinion, are likely to make a leap forward in 2026?
From F2 Venture Capital’s portfolio:
Zero Networks - A rapidly growing cybersecurity company that pioneered a new micro-segmentation technology, demonstrating strong momentum toward category leadership through a clearly differentiated and innovative approach.
Faye - The fastest‑growing travel insurance company in the world, now poised to break out as a travel super app complete with insurance, telemedicine, virtual credit card, eSIMS and everything else travelers need but never had all in one place until now.
Overall, we see 2026 as a year defined less by hype and more by execution, focused on building resilient, meaningful companies with long‑term impact.
