VC Survey 2026
“Success is no longer about hiring faster; it’s about converting intelligence into output”
Viola Ventures partner Alex Shmulovich joins CTech as part of the VC Survey 2026: The Next Leap, to discuss what measures success for Startup Nation in 2026, the acceleration of AI agents, and the most overlooked opportunity in Israel's tech landscape.
In 2026, “there is no single universal KPI that defines product-market fit or drives premium Seed-Series B valuations,” says Alex Shmulovich, Partner at Viola Ventures. According to Shmulovich, “Success is no longer about hiring faster; it’s about converting intelligence into output. For founders and VCs alike, leverage – not headcount – is now the true growth metric.”
Following the turbulence of recent years and the stabilization of 2025, the Israeli tech ecosystem is entering a new era: The Next Leap. Shmulovich 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.
Accelerating government budgets, regulatory openness, and a sustained inflow of elite talent in Israel “are creating the conditions for true agentic trust in the physical world,” Shmulovich continues, predicting that autonomous physical AI, particularly within the defense sector, will emerge much faster than many expect. Concurrently, he believes the most overlooked opportunity in Israel today, “is the hard-tech autonomy stack that substitutes humans in the field.”
While Shmulovich asserts that Israeli teams "uniquely combine deep expertise in networking, chips, systems, aerospace, and sensing with an execution speed forged in cyber and fintech,” he poses the question of whether government leadership is prepared to fully harness these capabilities. “With elections approaching, policy continuity may prove as decisive as technological strength,” he says.
You can read the entire interview below:
Fund ID
Name of Fund: Viola Ventures
Total Assets Under Management (AUM): $1.5B across seven early stage funds; part of Viola Group with over $6.5B AUM
Partners/Managers: Founded in 2000 by Shlomo Dovrat and Avi Zeevi, Viola Ventures is a pioneer of early-stage venture capital in Israel. In 2025, the firm began a leadership transition to Zvika Orron and Omry Ben David, who will lead the fund going forward. Avi Zeevi is moving into a senior advisor role, Shlomo Dovrat will continue as a general partner, and Alex Shmulovich was promoted to partner less than two years after joining the firm.
Notable Portfolio Companies (Active): Lightricks, Immunai, Payoneer, Faye, Payzen, Duetti, PhaseV, Personetics
Notable Exits: ironSource, Pagaya, Redis, OptimalPlus, Actimize
The Valuation Leap: Moving past the market correction, what is the single most critical metric (e.g. EBITDA, NRR) that will drive premium valuations in 2026?
In 2026, there is no single universal KPI that defines product-market fit or drives premium Seed-Series B valuations. It depends on the business model and what is the ideal proxy for product market fit.
For B2B SaaS with usage- or value-based pricing, the clearest signal is Net Revenue Retention adjusted for burn. High retention and expansion from existing customers, achieved efficiently, proves both value delivery and pricing power in a world where companies achieve over $100M ARR with fewer than 100 employees.
For B2G and defense companies, where sales are driven by long cycles and credibility, the critical metric is conversion of pilots and line of sight to a large-scale program of record. Moving from pilots to multi-year, budgeted deployments signals institutional lock-in and strategic alignment with an agency’s roadmap.
For deep-tech and frontier companies (semiconductors, quantum, infrastructure) valuations hinge on tier-one strategic partnerships. A committed industrial or commercial partner validates technical feasibility, market relevance, and future demand long before revenue scales.
In today’s bifurcated Israeli market, premium valuations accrue to companies that demonstrate the right proof of inevitability for their model, not a generic KPI.
The Agentic Leap: As we transition from 'Copilots' to autonomous 'Agents,' which specific vertical will be the first to fully trust AI with independent decision-making?
Based on what I’m seeing across the Viola CIO network, our leadership circles, and portfolio companies operating at the frontier of these shifts, the move from copilots to truly autonomous agents is already underway – but it’s unfolding in phases.
The first vertical to trust independent AI decision-making will probably be consumer-facing workflows. Areas like digital marketing, agentic commerce, and end-to-end payments are already highly automated, data-rich, and tolerant of error. Decisions are frequent, outcomes are measurable, and failures are reversible – ideal conditions for early autonomy.
The second phase is software development. We’re watching teams consolidate PRD writing, code generation, testing, and deployment into agentic pipelines. With over 50% of code already AI-generated, the bottleneck is no longer intelligence but infrastructure: DevOps, data pipelines, and governance layers that can support end-to-end automation. This is where some of the best technical talent globally is now focused.
The third phase will center on offline, agentic enterprise data workflows. As LLMs hit the ceiling of publicly available internet data, the next leap in model capability will come from deep engagement with proprietary enterprise data. This shift naturally favors non-real-time execution, where AI agents can operate over large, data-heavy workloads such as visual AI, pre-training, and unstructured data analytics. Working offline enables tighter controls, better auditability, and higher quality assurance.
Finally, autonomous physical AI, particularly in defense, will emerge faster than many expect. In Israel, accelerating government budgets, regulatory openness, and a sustained inflow of elite talent are creating the conditions for true agentic trust in the physical world.
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?
Rising geopolitical pressure is accelerating Israel’s shift toward hard tech, including smart manufacturing, advanced materials, optics, and energy systems. This transition is increasingly supported by targeted government funding aimed at rebuilding domestic capabilities and reducing reliance on fragile global supply chains. While true supply-chain independence is still early, the opportunity to create strategically important local ecosystems is real.
Beyond manufacturing, Israel is also securing sovereign compute. Project Nimbus and NVIDIA’s largest campus outside the U.S. are expanding access to local GPU capacity and training low-level AI engineering talent, enabling advanced development without full dependence on foreign platforms.
Israeli teams uniquely combine deep expertise in networking, chips, systems, aerospace, and sensing with execution speed forged in cyber and fintech. The open question is whether government leadership can fully harness these capabilities. With elections approaching, policy continuity may prove as decisive as technological strength.
The Efficiency Leap: In the era of AI-driven hyper-productivity, is the traditional correlation between 'Headcount Growth' and 'Company Success' permanently broken?
From what I’m seeing, the correlation between headcount growth and success is structurally weakening, not temporarily breaking.
According to the Israeli Central Bureau of Statistics, in 2025 total tech employment grew just 1.3%, while R&D roles declined 3.2%, yet productivity in software rose 6.6%. That’s AI at work.
Scaled companies rarely cut deep, but when talent churns, founders increasingly ask whether AI can replace the role instead of rehiring, especially at the junior level. At the same time, tech talent is flowing into non-tech sectors, lifting economy-wide productivity.
Success is no longer about hiring faster; it’s about converting intelligence into output. For founders and VCs alike, leverage – not headcount – is now the true growth metric.
The Contrarian Leap: What is one sector or trend currently ignored by the herd that you believe represents the most undervalued opportunity for the coming year?
The most overlooked opportunity in Israel today is the hard-tech autonomy stack that substitutes humans in the field – from perception to deployment at scale. This includes edge computer vision, resilient connectivity, fleet orchestration, and physical AI systems.
We’re seeing early signals from companies like Decart and Enigma Labs building world models around simulation and decision layers, Mobileye’s acquisition of Mentee strengthening end-to-end autonomy, and fast-moving defense players like Kela, Tip & Cue, and Oz applying these concepts in real-world environments.
While the herd chases software-only AI, the real moat is owning physical deployment, proprietary data, and operational uptime across connected devices.
Finally, what are 2-3 startups that, in your opinion, are likely to make a leap forward in 2026?
From Viola Ventures’ portfolio companies:
1. Impala.ai: Impala enables enterprises to scale AI inference predictably and cost-efficiently as AI use cases move from pilots to production. Its platform runs inference inside the customer’s own cloud, orchestrating any model across any hardware while maximizing throughput and cost efficiency. As enterprise workloads shift toward heavy, bursty, distributed inference – powering core business processes rather than demos – Impala provides the missing infrastructure layer to operate AI reliably, securely, and at scale in 2026 and beyond.
2. Tip & Cue: Tip & Cue is building the Signal Source of Truth – a real-time spectrum intelligence platform that helps operators see, understand, and protect wireless connectivity in complex environments. As modern defense and critical operations increasingly rely on connected systems (robotics, sensors, drones, and distributed platforms) the electromagnetic spectrum has become a contested and mission-critical layer. With AI now making it possible to turn fragmented signals into live, actionable intelligence, Tip & Cue is uniquely positioned to deliver scalable, software-driven spectrum awareness when it matters most.
3. Sympera: Sympera is redefining how banks understand and act on their data by using AI to democratize advanced analytics through a highly intuitive, business-friendly experience. Its platform enables financial institutions to automate complex analysis, uncover insights faster, and personalize services without relying on scarce technical talent. The timing is powerful: the AI revolution is making sophisticated analysis accessible beyond specialists, while easing interest rates and margin pressure are pushing banks to drive efficiency and deliver more tailored customer experiences. Led by a founder with exceptional market fit, having built Actimize and Personetic, Sympera brings rare credibility and execution power to a critical inflection point in banking technology.
