VC Survey 2026
“If 2025 is anything to base it on, successful cyber companies will be able to take their pick between M&A and IPO”
Zack Fagan, Partner at Earth & Beyond Ventures, joined CTech for its 2026 VC Survey.
Zack Fagan, Partner at Earth & Beyond Ventures.
(Video: Orel Cohen)
“Israel, and the world as a whole, have experienced a turbulent few years in terms of venture capital and liquidity. Mega funds have kept top-tier startups private longer, while global volatility and higher interest rates have made IPOs less attractive. For Israeli companies, 2025 was the year that IPOs finally began to return. That said, it was also the year of the mega-exit, setting a high bar for valuations,” said Zack Fagan, Partner at Earth & Beyond Ventures, when asked whether Israel will see a resurgence of IPOs in 2026.
“Looking to 2026, I expect that we will see a continued upward trend of IPOs and SPACs (which are coming back into fashion), driven by a backlog of companies that have been waiting for the right macroeconomic and geopolitical conditions. In parallel to this, M&A shows no signs of slowing down,” he added.
“If I had to guess, I would predict that more traditional, established SaaS and Fintech companies will tend towards IPOs, while assets strategic to large companies like semiconductors, AI infrastructure, and broader deeptech will tend towards M&A. As for Cyber, it’s as hot as it ever was, so if 2025 is anything to base it on, successful cyber companies will be able to take their pick.”
Following the turbulence of recent years and the stabilization of 2025, the Israeli tech ecosystem is entering a new era: The Next Leap. Fagan joined CTech to share insights for its VC Survey 2026.
You can read the entire interview below.
Fund ID
Fund Name: Earth & Beyond Ventures
Total Assets Under Management: $60M
Partners/Managers: Doron Zauer, Zack Fagan, Assaf Wise, Daniel Recanati, Israel Biran
Notable Portfolio Companies: Quamcore, SkyPearl, PixelSight, Whilx, Li-Generate
Notable Exits: N/A
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 narrative is not shifting from innovation to resilience, it is converging. For Israeli tech, innovation has always been a function of resilience.
Israel’s competitive advantage has never been abstract creativity alone; it has been the ability to innovate under constraint and to overcome the status quo. Limited resources, persistent security challenges, and complex operating environments have forced companies to build technologies that work reliably in real-world conditions, not just in controlled settings.
What is changing in 2026 is that this resilience is becoming more visible and more valuable to global investors. Israel is increasingly demonstrating the ability to deploy physical, infrastructure-level technologies - in defense, energy, AI, and critical systems - under real operational stress.
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?
Like everything else, the answer is that things are evolving daily. Three years ago, there were barely any funds investing in deeptech and no one would touch defense. Today, Israel is fairly well positioned for pre-seed and seed investing in deeptech. We at Earth & Beyond invest very early in CAPEX-intensive, deeptech, and there are now several other funds that look at similar companies and stages. For mature deeptech companies, Israel is also fairly well positioned - once a company breaks through and has a product in the market, many generalist growth investors will look at the company favorably.
Where Israel is probably lacking is in the middle gap where deeptech companies might have already raised substantial capital in the earlier stages, but due to the nature of the cycle as compared to SaaS and AI, have not yet deployed into the market in a significant way.
However, as I said above, this space is evolving at a rapid rate, and what is true today will likely already be different in six months. So the bottom line is that I believe Israeli funds have realized the potential in deeptech investments, and I am confident that the local ecosystem will figure out how to support such companies across their lifecycle, as it did with other industries.
The Efficiency Leap: In the era of AI-driven hyper-productivity, is the traditional correlation between 'Headcount Growth' and 'Company Success' permanently broken?
There has definitely been a shift - with Base44 being the most obvious example - however, I don’t believe that AI will completely replace talented human capital, but it will change the way companies view hiring and building out of teams. In terms of growth, companies will likely tend towards spending on more senior talent and AI specific positions (ex. AI orchestrators, policy, etc.), while also investing in sales and customer support for enterprise clients - when spending large sums of money, people still tend to want to connect with people.
Bottom line - the correlation isn’t broken per-se, but it has definitely changed, and the headcount growth will shrink and be re-distributed to other positions.
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?
There’s little question that cyber will continue to reign supreme, but I expect deeptech and industrial technologies to see a major jump in the coming years. Driven by AI infrastructure demand, the desire for modernized, green energy solutions, the (unfortunate) increased focus on military spend, and the need to bolster industrial infrastructure, physical innovation that has taken the back seat for many years, will make a major comeback.
Israel is well positioned to deliver leading companies in these spaces. A clear example is chips and advanced compute, where Israel has decades of proven leadership in chip architecture, networking silicon, AI accelerators, memory technologies, and system-on-chip design, making it a critical contributor to the global semiconductor stack (without needing to own fabs).
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- “When Taiwan gets tense, every AI chip gets expensive. Companies building around that constraint will own the next decade.”
Finally, name 2-3 startups that, in your opinion, are likely to make a leap forward this year.
Addionics - The world of batteries has long needed innovation, and not just on the chemistry side. Addionics has found a way to pull this off and really push the envelope in terms of combining deeptech innovation, with real industry and manufacturing capabilities, and are now showing some impressive traction.
Elssway (Earth & Beyond Portfolio) - Elssway has built a totally new paradigm for energy transmission and charging infrastructure that enables significantly cheaper CAPEX and simple deployment across large areas. They are changing the way cities look at electrification in public spaces, with initial deployments already underway and more to come soon.
MNDL (Earth & Beyond Portfolio) - MNDL Bio builds AI-powered DNA engineering software that helps biotech and pharma R&D teams reduce trial-and-error when producing proteins in living cells, one of the biggest hurdles in turning a promising synthetic biology revolution into scalable, economically viable production. Based on 15+ years of peer-reviewed research from Tel Aviv University, the software improves protein expression by optimizing DNA gene sequences for the R&D team’s chosen host organism - shortening R&D cycles and making scale-up faster and more predictable.
