Israel’s defense giants and a new generations of startups are reshaping how the country fights its wars https://www.jpost.com/defense-and-tech/article-908371

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A different approach comes from XTEND, whose intuitive operating systems enable personnel to control drones in complex environments with minimal training.

Founded in 2018 by Aviv Shapira, Matteo Shapira, Rubi Liani, and Adir Tubi as a gaming company, since October 7, the company has shifted its focus to specialize in human-guided autonomous machine systems for defense applications. The company has gained international recognition for combining immersive control technologies with autonomous capabilities, allowing operators to conduct reconnaissance, inspect hazardous locations, or perform tactical missions while remaining outside immediate danger.

The company’s platforms have been used in the Israel-Hamas War, Operation Rising Lion, and during the deadly earthquake in Venezuela. “Other companies are still testing their products, but we are proving ours during wartime,” Aviv Shapira told D&T.

Aero Sentinel, a boutique Israeli drone manufacturer specializing in covert intelligence-gathering drones, is rapidly gaining traction among elite military units and international customers. The platforms are short- and medium-range drones that are optimized for tactical operations, border patrol, and other sensitive surveillance and reconnaissance (ISR) missions.

The platforms are built for environments where traditional drones struggle, such as GPS-denied zones, urban canyons, or areas saturated with RF interference, where many UAVs lose stability or fail entirely. Aero Sentinel’s systems are engineered to adapt, relying on multisensor fusion and onboard decision-making to maintain flight integrity.

The company’s platforms were used in covert missions during Operation Rising Lion, and its headquarters were struck by an Iranian ballistic missile during Operation Roaring Lion.

“The fact that we were targeted as a high-value strategic objective speaks for itself. It reflects the quality, relevance, and operational importance of the systems we provide,” the company told D&T.

C-UAS
As low-cost drones become an increasingly common feature of modern battlefields, systems that improve infantry effectiveness without requiring entirely new weapons have attracted growing international attention.

Conflicts around the world have demonstrated how inexpensive unmanned aircraft can conduct reconnaissance, deliver precision strikes, disrupt logistics, and overwhelm traditional air defense systems. Their widespread use has created an equally urgent demand for technologies capable of detecting, identifying, and defeating them.

Israel has responded by developing one of the world’s most diverse counter-UAS industries.

Israel’s defense-tech ecosystem is undergoing one of the most significant transformations in its history.

For decades, Israel’s three major defense contractors developed everything from missiles and radar systems to satellites and armored vehicle protection, while the Israel Defense Forces (IDF) served as both customer and proving ground.


It was a tightly held domain that has increasingly expanded into a sprawling, multilayered innovation network of start-ups, research centers, dual-use technology companies, and military-industry partnerships that are building technologies that are redefining how wars are fought.

The ecosystem’s rise comes at a moment when global demand for advanced defense technology is surging. Israel’s defense-tech landscape is not only reshaping the country’s security posture but also redefining its economic trajectory, industrial priorities, and global influence.



IDF Military Drone Unit train with their drones near the Syrian border, northern Golan Heights, June 26, 2025.
IDF Military Drone Unit train with their drones near the Syrian border, northern Golan Heights, June 26, 2025. (credit: MICHAL GILADI/FLASH90)

Unlike many countries where defense innovation is concentrated within a handful of large contractors, Israel’s ecosystem has always been closely connected to its broader technology sector. Engineers frequently move between military service, commercial start-ups, and established defense companies, carrying operational knowledge with them.


This start-up culture has become particularly important as warfare itself changes.

The proliferation of inexpensive unmanned aircraft, artificial intelligence (AI), electronic warfare (EW), and software-defined operations has lowered barriers to innovation. Modern militaries increasingly require software updates measured in weeks rather than hardware upgrades measured in decades. Israeli start-ups, accustomed to rapid product iteration, are well positioned to deliver those capabilities.


Yet the country’s established defense contractors remain indispensable.

The backbone of the ecosystem
Israel Aerospace Industries-IAI, Rafael Advanced Defense Systems, and Elbit Systems continue to anchor Israel’s defense industry, providing manufacturing capacity, systems integration, global supply chains, and decades of engineering expertise that few start-ups could replicate.


IAI, the country’s largest defense contractor, has been long regarded as Israel’s aerospace powerhouse. It combines satellite manufacturing, UAV development and manufacturing, missile defense, and intelligence systems under one organization. Its solutions have been central during the last three years of multifront war that Israel has been fighting – from its Arrow defense system that has intercepted countless Iranian missile barrages to its UAVs striking targets far from the country’s borders.

IAI’s growing collaboration with smaller companies, particularly in autonomous systems and AI-driven mission management, shows how even the largest players are adapting to a more distributed innovation model.

“We are always trying to look two generations ahead. We don’t have the luxury to wake up one morning and have something ready the next day; we look for the answers decades ahead of time,” Boaz Levy, chairman of IAI, told Defense & Tech by The Jerusalem Post in an interview.

Rafael Advanced Defense Systems’ Storm Shield
Rafael Advanced Defense Systems’ Storm Shield (credit: RAFAEL ADVANCED SYSTEMS)
Rafael remains synonymous with layered air defense. The company’s role in developing the Iron Dome and the Iron Beam directed energy system has made it one of the world’s most recognized missile defense companies. The company has repeatedly produced the technologies that redefine Israel’s strategic posture. The Trophy Active Protection System, Spike missiles, advanced electro-optics, and cutting-edge EW systems have all emerged from Rafael’s labs.

According to foreign reports, Rafael’s Spike missiles were one of the platforms used to destroy Iranian ballistic missiles and their launchers in the opening round of Operation Rising Lion in June 2025.

But Rafael’s strategy increasingly extends beyond internal research. The company has expanded collaboration with younger firms developing AI-enabled targeting, advanced sensing, and autonomous capabilities, recognizing that software innovation often occurs faster outside traditional corporate structures.

Elbit Systems, meanwhile, has evolved into one of the world’s most diversified defense technology companies. Rather than specializing in one domain, the company built a portfolio that spans air, land, sea, cyber, EW, and C4I. This breadth gives the company a unique vantage point – it sees how technologies intersect, how operational needs evolve, and where gaps emerge.

One of its most influential contributions to Israel’s defense-tech identity is its work on soldier modernization. Its soldier systems are used by militaries around the world, but their influence inside Israel is even more profound. They shape how the IDF trains, fights, and adapts to new threats. And they create a natural bridge to start-ups working on computer vision, autonomy, and electro-optics, many of which build technologies that plug directly into Elbit’s soldier ecosystem.

Elbit is one of Israel’s most successful defense exporters, with customers in more than 30 countries. Its relationships with foreign militaries allow it to identify emerging global needs and feed that intelligence back into Israel’s innovation ecosystem.

Together, the three companies remain the industrial backbone of Israeli defense. Yet these primes no longer operate in isolation. They are increasingly intertwined with start-ups that bring agility, software expertise, and fresh operational perspectives.

Winning the drone war
Few technologies illustrate Israel’s innovation ecosystem better than autonomous aerial systems.

The country has been a pioneer in unmanned aircraft for decades but today a new generation of companies is pushing autonomy beyond surveillance into logistics, maneuver, and collaborative operations.


Aeronautics, now part of Rafael, continues to expand its portfolio of tactical unmanned systems, providing intelligence, surveillance, and reconnaissance (ISR) capabilities for military customers around the world. Its integration into Rafael also demonstrates another defining characteristic of Israel’s ecosystem: Promising companies often become part of larger industrial groups while retaining their innovative culture.

A different approach comes from XTEND, whose intuitive operating systems enable personnel to control drones in complex environments with minimal training.

Founded in 2018 by Aviv Shapira, Matteo Shapira, Rubi Liani, and Adir Tubi as a gaming company, since October 7, the company has shifted its focus to specialize in human-guided autonomous machine systems for defense applications. The company has gained international recognition for combining immersive control technologies with autonomous capabilities, allowing operators to conduct reconnaissance, inspect hazardous locations, or perform tactical missions while remaining outside immediate danger.

The company’s platforms have been used in the Israel-Hamas War, Operation Rising Lion, and during the deadly earthquake in Venezuela. “Other companies are still testing their products, but we are proving ours during wartime,” Aviv Shapira told D&T.

Aero Sentinel, a boutique Israeli drone manufacturer specializing in covert intelligence-gathering drones, is rapidly gaining traction among elite military units and international customers. The platforms are short- and medium-range drones that are optimized for tactical operations, border patrol, and other sensitive surveillance and reconnaissance (ISR) missions.

The platforms are built for environments where traditional drones struggle, such as GPS-denied zones, urban canyons, or areas saturated with RF interference, where many UAVs lose stability or fail entirely. Aero Sentinel’s systems are engineered to adapt, relying on multisensor fusion and onboard decision-making to maintain flight integrity.

The company’s platforms were used in covert missions during Operation Rising Lion, and its headquarters were struck by an Iranian ballistic missile during Operation Roaring Lion.

“The fact that we were targeted as a high-value strategic objective speaks for itself. It reflects the quality, relevance, and operational importance of the systems we provide,” the company told D&T.

C-UAS
As low-cost drones become an increasingly common feature of modern battlefields, systems that improve infantry effectiveness without requiring entirely new weapons have attracted growing international attention.

Conflicts around the world have demonstrated how inexpensive unmanned aircraft can conduct reconnaissance, deliver precision strikes, disrupt logistics, and overwhelm traditional air defense systems. Their widespread use has created an equally urgent demand for technologies capable of detecting, identifying, and defeating them.

Israel has responded by developing one of the world’s most diverse counter-UAS industries.

D-Fend
D-Fend (credit: Courtesy)
D-Fend’s flagship technology uses cyber-based takeover methods to safely control hostile drones without jamming or kinetic fire. This approach is increasingly favored in civilian environments where collateral damage is unacceptable.

Founded in 2017 in the garage of CEO and chairman Zohar Halachmi, along with CTO and vice president Assaf Monsa and chief product officer and president Yaniv Benbenisti, the software-driven company has built its reputation on the simple but demanding premise of neutralizing rogue drones cleanly, quietly, and without jamming half the city or blowing anything out of the sky.

“Commercialized drones or the DIY ones are causing 90% of the incidents… Small drones can be very problematic,” Halachmi told D&T. “This is a sensitive, surgical system.”

Sentrycs pursued a similarly sophisticated strategy. Instead of relying primarily on radar or kinetic defeat, its systems analyze communication protocols between drones and their operators, enabling precise detection and disruption while minimizing interference with nearby wireless networks.

The company provides militaries and civilian infrastructure such as airports and even sporting events like FIFA World Cup with the ability to classify drones in real time. Its systems distinguish between friendly and hostile UAS, which is a critical capability as drone usage expands.

In November 2025, the company was acquired by the American defense conglomerate Ondas Holdings in a deal valued at approximately $224.6 million. The acquisition combined Sentrycs’s cyber-over-RF technology with Ondas’s broader autonomous systems, creating a more comprehensive layered solution for military, homeland security, and critical infrastructure customers worldwide.

Meanwhile, SmartShooter has approached the drone challenge from the perspective of the soldier on the ground. Its fire-control technologies combine electro-optics, computer vision, and target tracking to increase the probability of successfully engaging small aerial threats.

“Part of the beauty is that we can use the same core technology for different applications. We can continuously upgrade the software and provide it on various platforms in our broad portfolio,” Shir Ahuvia, VP of product told D&T. “That’s the magic.”

Seeing more, seeing less
Information has always been a decisive military advantage, but the challenge today is not collecting data – it’s processing it quickly enough to support operational decisions. Electro-optical technologies remain one of Israel’s greatest strengths, supported by decades of expertise in sensors, thermal imaging, laser systems, and advanced optics.