VC Survey 2026
“Deep tech, defense, and industrial applications are Israel’s next major export engine”
Elron Ventures CEO Yaniv Schneider and chairperson Lisya Bahar Manoah join CTech to discuss why Israeli VC must evolve to support high-CAPEX ventures, the rise of a third liquidity path, and how deep tech is set to become Israel’s next major export engine, as part of CTech's VC Survey 2026: The Next Leap.
“Cybersecurity is here to stay, but deep tech, defense, and industrial applications are set to become Israel’s next major export engine,” said Yaniv Schneider, CEO, and Lisya Bahar Manoah, chairperson of Elron Ventures. Leading this shift, they argue, will be startups “that integrate software, hardware, and automation to address global-scale challenges.”
Following the turbulence of recent years and the stabilization of 2025, the Israeli tech ecosystem is entering a new era: The Next Leap. Schneider and Bahar Manoah 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.
The pair argue that “Israeli VC is evolving fast” to meet the demands of high-CAPEX sectors through global syndication and co-investment with industrial giants. “Hardware-heavy sectors like defense, energy, robotics and quantum all demand capital-intensive, long-horizon bets, and the old ‘lean startup’ playbook isn’t enough.” Meanwhile, looking at the liquidity landscape, they summarize that “M&A remains the backbone, IPOs are gaining strength, and secondaries are emerging as a third liquidity path for Israeli tech in 2026.”
You can read the entire interview below:
Fund ID
Name of Fund: Elron Ventures
Total Assets Under Management (AUM): $530M (invested)
Partners/Managers: Lisya Bahar Manoah (chairperson, Elron Ventures and managing partner, Arieli Group), Yaniv Schneider (CEO, Elron Ventures)
Notable Portfolio Companies (Active): Addionics, CyberRidge, Red Access, Tamnoon, Breeze, Axionus, Cyvers, Openlegacy, Notal Vision, Nitionodes, Wonder Robotics, Zengo
Notable Exits: Cynerio, IronScales, Cybersixgill, Secdo, CartiHeal, Prompt Security (CyberFuture), Entitle (CyberFuture)
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?
M&A remains the backbone, IPOs are gaining strength, and secondaries are emerging as a third liquidity path for Israeli tech in 2026
Israeli ventures have a strong M&A track record, and we know the playbook. In 2026, M&A will continue to be a dominant liquidity route, particularly in cyber and AI, as strategic players pursue growth through acquisitions. The trend is already happening – Elron alone completed four exits last year, three of them via M&A.
At the same time, the IPO market is getting stronger, building on momentum that began in 2025. A wave of growth-stage investments in cybersecurity and AI has created a pipeline of companies increasingly willing to go public to fund their next expansion rounds. Add to that the renewed hype in defense and deep tech, from robotics and quantum to space and batteries, and IPOs are moving from “optional” to “strategic”.
Beyond IPOs and M&A, secondary exits are accelerating. Markets are faster, companies are reaching scale earlier, and private equity players are actively looking for discounted entry points. Elron has already completed one secondary exit this year.
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’s about “mental discipline under extreme constraints” thriving under pressure, adapting faster, and executing through adversity. Israeli deep tech does more than just solve problems, it wins them over and over.
For investors, the narrative is that Israeli tech combines upside potential with proven durability, a rare edge in today's volatile markets.
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?
Israeli VC is evolving fast! Hardware-heavy sectors like defense, energy, robotics and quantum all demand capital-intensive, long-horizon bets, and the old “lean startup” playbook isn’t enough.
VCs are now co-investing, syndicating globally, and blending private equity with venture capital to fund these high-CAPEX ventures. We have aligned our strategy to this new reality as well. In our recent deep tech investment in Addionics, which is developing next-generation battery solutions, we joined ranks with strategic and industrial investors, including General Motors.
The ecosystem is learning to think bigger, build longer, and partner smarter. We build the infrastructure of the future, and investors are starting to treat it like the strategic asset class it has become.
Related articles:
The Efficiency Leap: In the era of AI-driven hyper-productivity, is the traditional correlation between 'Headcount Growth' and 'Company Success' permanently broken?
Headcount is no longer the growth metric. AI-driven productivity lets companies achieve far more with the same teams, scaling revenue, entering new markets, and compressing growth timelines. Israeli tech is proving that lean teams can deliver outsized global impact, turning efficiency into exponential growth.
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, AI-powered deep tech will be a key differentiator and will be integrated into products across leading industries.
Cybersecurity is here to stay, but deep tech, defense, and industrial applications are set to become Israel’s next major export engine. Startups that integrate software, hardware, and automation to address global-scale challenges will lead this shift.
Our new strategy reflects this belief. Our recent investment in CyberRidge, a post quantum- deep tech company, is a case in point, and demonstrates the convergence between our traditional cybersecurity-software focus and our deep tech-hardware focus.
Finally, what are 2-3 startups that, in your opinion, are likely to make a leap forward in 2026?
From Elron's portfolio:
1. Addionics - Addionics is well positioned to make a leap forward this year, as global electrification and energy transition trends continue to drive strong demand for advanced battery technologies. The company’s physics-based 3D current collectors improve energy density, safety, and cost, while remaining compatible with any battery chemistry. As investors, we believe Addionics’ drop-in solution and scalable manufacturing approach position it as a key enabler of next-generation batteries across EV, defense, and space markets.
2. CyberRidge - CyberRidge is also well poised to make a leap forward this year as the quantum security market accelerates and organizations prepare for the post-quantum era. As quantum computing is expected to weaken today’s cryptographic algorithms and “harvest now, decrypt later” threats intensify, CyberRidge’s physics-based solution ensures that data in transit is unrecordable from day one. As investors, we believe its growing deployments across defense, intelligence, and telecom organizations position CyberRidge as a critical enabler of next-generation secure communications.
