Sequoia’s Shaun Maguire: “Maintaining the world’s most advanced cyber capabilities is existential for Israel”
In an interview with Entrée Capital founder Avi Eyal at the Tech1 conference in Eilat, Maguire, a partner at the VC fund Sequoia, said: "To create truly massive companies you need to concentrate enormous human talent into a very small number of teams."
As Israel edges toward a fragile postwar recovery, the focus among the country’s top investors is shifting from resilience to strategic renewal. At the Tech1 conference in Eilat, Entrée Capital founder Avi Eyal sat down with Sequoia Capital partner Shaun Maguire to discuss what comes next - and where Israel must double down to stay ahead. The message was clear: Israel’s future lies in deep tech, and it must bet big on cyber, AI, and defense.
Avi Eyal: The topic of our conversation is rebuilding. I feel like the war may end in the coming weeks, the hostages will return, the reservists will re-enter the labor market, but the growth rate is still quite slow and inflation remains high. What do you think Israel should focus on now?
Shaun Maguire (Sequoia Capital): “Cyber is self-sustaining at this stage, and it’s Israel’s greatest strategic advantage. People tend to underestimate just how crucial this field is - it’s not just about economic value. Maintaining the world’s most advanced cyber capabilities is existential for Israel, and we have to keep investing heavily in it.
“When it comes to AI, the buzzwords get thrown around too loosely. But the reality is this: it’s becoming a global dividing line, like having a nuclear program or not. And I do believe Israel will end up in the right category. The scientists here are amazing.
“The third pillar Israel needs to focus on is defense tech. I believe exports from this sector could increase tenfold over the next 15 years.”
Eyal: If we strategically invest in energy, can that form a foundation for building more AI companies, something massive, even quantum computing?
Maguire: “Yes. It’s true that these systems require significant energy, but Israel is already advanced in that area. Quantum systems, in particular, are a subcategory of defense tech, and in this field, the U.S., China, and Israel are already leading the world.”
Eyal: The rate of new company formation over the past two years is the slowest in a decade. Should we be worried?
Maguire: “The best wine comes from the hardest seasons. The sugar is concentrated in just a few grapes. That may be hard to hear, but to create truly massive companies, you need to concentrate enormous human talent into a very small number of teams. The first 30 to 50 employees have to be exceptional, at an entirely different level. So I’m less concerned with how many companies are being founded and more concerned with the quality of the ones that are.”
