VC Survey 2026
“2026 will no longer be a one-way street toward forced consolidation”
Intel Capital MD Roi Bar-Kat joins CTech to give his outlook on selective IPO openings, hybrid VC models, and the domains set to drive Israel's next export engine, as part of CTech's VC Survey 2026: The Next Leap.
“2026 will not be a return to the 2021 playbook, but it will no longer be a one-way street toward forced consolidation,” says Roi Bar-Kat, managing director of Intel Capital Israel. Bar-Kat believes that while M&A will continue to dominate overall liquidity volume for Startup Nation this year, the return of IPOs as a viable option for a narrow cohort “materially improves negotiating leverage and valuation discipline across the ecosystem.” He specifies that for Israeli tech, IPOs will be available primarily to companies that demonstrate “clear category leadership, strong gross margins, and a credible path to sustained profitability.”
Following the turbulence of recent years and the stabilization of 2025, the Israeli tech ecosystem is entering a new era: The Next Leap. Bar-Kat 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.
Bar-Kat argues that the Israeli asset class is being reframed from “exceptional technology creation” to “exceptional performance under constraint,” which is a key distinction for LPs underwriting long-duration risk. To support the high-CAPEX of hardware-heavy domains like Deep Tech, Bar-Kat maintains that the successful model in 2026 is a hybrid one. Traditional Israeli VC funds, “optimized for capital-light software, are not structurally designed to fund high-CAPEX journeys alone,” he says. What works is “combining early-stage Israeli technical depth with global growth capital, strategic access, and non-dilutive funding mechanisms.”
You can read the entire interview below:
Fund ID
Name of Fund: Intel Capital
Total Assets Under Management (AUM): $5B
Partners/Managers: Lisa Cohen, Yoni Griefman and Roi Bar-Kat (Israeli-based partners)
Notable Portfolio Companies (Active): Israeli companies include Buildots, Proteantecs, Overwolf, WSC Sports, Xsight, Zenity. Notable US companies include Anyscale, Scale AI, MinIO, RunPod, proteanTecs, Beep, Figure, FieldAI
Notable Exits: Astera Labs, Joby, VMWare, Sprinklr, Red Hat, IMS, mongoDB, Venafi, Habana Labs
The Liquidity Leap: After a period defined by cash preservation, will 2026 see the reopening of the IPO window for Israeli tech, or will M&A remain the sole viable liquidity event?
After several years defined by capital discipline and private market extensions, 2026 is likely to mark a selective reopening of the IPO window, not a broad one. Public markets are open again, but only for companies that demonstrate a rare combination of scale, predictability, and capital efficiency. For Israeli tech, this means IPOs will be available primarily to companies with clear category leadership, strong gross margins, and a credible path to sustained profitability. M&A will continue to dominate overall liquidity volume, but the return of IPOs as a viable option, even for a narrow cohort, materially improves negotiating leverage and valuation discipline across the ecosystem. In short, 2026 will not be a return to the 2021 playbook, but it will no longer be a one-way street toward forced consolidation.
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'?
The Israeli tech narrative is indeed shifting, but not away from innovation. Rather, innovation is now assumed. What global LPs increasingly value is durability under pressure. Israeli companies have been built in an environment of constant volatility, whether geopolitical, macroeconomic, or talent-driven. Over the past few years, that translated into faster pivots, earlier cost corrections, and an unusually pragmatic approach to capital allocation. As a result, the asset class is being reframed from “exceptional technology creation” to exceptional performance under constraint. Extreme resilience is not replacing innovation, it is contextualizing it. For LPs underwriting long-duration risk, that distinction matters.
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 always produced world-class deep technology, particularly in hardware, semiconductors, and defense-adjacent domains. What is changing is the capital stack required to support these companies at scale. Traditional Israeli VC funds, optimized for capital-light software, are not structurally designed to fund high-CAPEX journeys alone. The model that works in 2026 is a hybrid one, combining early-stage Israeli technical depth with global growth capital, strategic access, and non-dilutive funding mechanisms earlier in the lifecycle. Crucially, Israel enters this phase from a position of continued leadership in cutting-edge technologies, supported by a dense concentration of top-tier founders, experienced investors, and world-leading R&D centers. This combination preserves Israel’s edge while allowing capital formation models to evolve.
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The Efficiency Leap: In the era of AI-driven hyper-productivity, is the traditional correlation between 'Headcount Growth' and 'Company Success' permanently broken?
The correlation between headcount growth and company success is fundamentally weakening, and in some cases breaking entirely. AI-native workflows allow small, senior teams to achieve output levels that previously required entire departments. The winners are not companies that grow headcount fastest, but those that deploy AI to compress cycle times, reduce handoffs, and concentrate decision-making. This is particularly relevant for Israeli startups, which traditionally operate with lean teams and high individual ownership. In 2026, efficiency is no longer a defensive posture. It is a competitive advantage.
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?
By 2030, Israel’s next major export engines are likely to emerge along two parallel tracks. The first is AI-native software platforms embedded into mission-critical enterprise workflows, where intelligence moves from analytics into real-time decision-making. The second is data center and compute infrastructure, including technologies across compute, memory, storage, networking, and interconnect, which form the physical backbone of the AI economy. These domains differ in go-to-market and capital requirements, but share common characteristics, deep technical moats, long-term relevance, and strategic importance to global buyers. Together, they reflect Israel’s ability to compete not only at the application layer, but at the foundational layers of the modern technology stack.
Finally, what are 2-3 startups that, in your opinion, are likely to make a leap forward in 2026?
From Intel Capital Israel’s portfolio:
1. Nexite – Nexite is well positioned to break out because it operates at the intersection of physical AI, real-time data, and operational decision-making in brick-and-mortar retail. The company transforms physical spaces into continuously measured and optimized environments, effectively bringing AI-native intelligence into the physical world. What makes the timing particularly compelling is that physical AI is moving from experimentation to core infrastructure.
2. Buildots – Buildots applies AI and computer vision to turn the day-to-day chaos of construction into structured, actionable data by continuously comparing site reality to the project’s model and schedule. Teams gain visibility into progress, risk, and execution gaps, along with the ability to act early and course-correct. With accelerating investment in data center construction and strong North American adoption, there's a huge opportunity for Buildots to leap forward this year as owners and contractors demand greater predictability on complex builds.
3. Xyte – AI is advancing rapidly, but most of it remains disconnected from the physical world. At the same time, trillions of physical devices lack the business and operational infrastructure needed to become scalable, AI-driven services. Xyte addresses this gap. Xyte is building the business and control plane for intelligent, AI-enabled physical products, enabling manufacturers and enterprises to operate, monetize, and continuously improve devices across their full lifecycle through a single system of record. By bridging AI and real-world devices, Xyte turns physical products into software-defined, intelligent businesses and is emerging as foundational infrastructure for the device economy.
