2025 VC Survey“Israel's high-tech sector will continue to thrive” in 2025, says Elron Ventures
2025 VC Survey
“Israel's high-tech sector will continue to thrive” in 2025, says Elron Ventures
Chairperson Lisya Bahar Manoah shares insights with CTech for its 2025 VC Survey.
“To accelerate the high-tech engine, Israel needs to make investments today to ensure that companies will have strong and thriving workforces,” said Elron Ventures Chairperson Lisya Bahar Manoah. “This includes boosting early-stage growth and diversifying talent. Integrating non-engineers into tech roles, such as product management and sales, launching upskilling programs, and introducing students to technology at an earlier age can help boost the workforce.”
Manoah joined CTech to share insights as part of its 2025 VC Survey. The firm, which has been involved in the Israeli tech scene since 1962, is bullish on sectors such as cybersecurity, which accounted for 40% of Israel's total investments, underscoring its importance.
“In 2025, Israel's high-tech sector will continue to thrive, with cybersecurity leading the way due to increasing global demand for AI-driven threat detection and zero-trust systems,” she added. “The defense industry, bolstered by rising global defense budgets and evolving security needs, is set for continued expansion.”
You can read the whole interview below.
Fund ID
Name of Fund/Funds: Elron Ventures
Total Sum of the Fund: $255M
Partners: Lisya Bahar Manoah, Chairperson, Elron Ventures & Managing Partner, Arieli Group; Yaron Kulas - Co-CEO, Rafael Development Corporation; Yaron Elad - CEO, Elron Ventures
Notable/Select Portfolio Companies (Active): Wonder Robotics, Red Access, Cynerio, Tamnoon, Zengo, Scribe, Sayata, Breeze, Cyvers
Notable Exits: IronScales, Cybersixgill, Secdo, CartiHeal, Given Imaging
2024 is over. How can you summarize it in terms of the Israeli high-tech industry?
In 2024, the Israeli high-tech sector showed strong resilience despite global economic challenges and geopolitical shifts. Elron Ventures, a cornerstone of Israel's tech ecosystem since 1962, has navigated numerous crises and turnarounds in the market over the years. Throughout these challenges, we learned that the most important factors are people and their ability to adapt and persevere in dynamic environments.
We believe strongly in deep tech, particularly cybersecurity and defense, and play a leading role in advancing innovation in these sectors. Elron currently holds a portfolio of over 25 active companies, including those in Elron’s CyberFuture platform. In 2024, cybersecurity accounted for 40% of Israel's total investments, underscoring its critical importance. With defense-tech investment rising 22% year-over-year, our long-standing partnership with Rafael, a leading global defense company, is key for defense-related investments. One of our defense portfolio companies, Wonder Robotics has seen a big change in the use cases and applications of their drones in recent years, with growing demand from the defense market alongside their commercial applications.
Looking ahead to 2025 - What challenges and opportunities await the Israeli high-tech sector in the coming year, and how are you, as investors, preparing for them?
In 2025, we expect to see additional growth in M&As and the IPO market to reopen. The surge in M&A activity in 2024 has boosted investments in the tech ecosystem, making 2024 a record year globally.
This year, Elron Ventures announced three significant M&A deals: Cybersixgill’s acquisition by BitSight; the acquisition of IronScales’ shares by private equity firm PSG Equity; and the acquisition of CartiHeal by Smith & Nephew.
Looking ahead, the ongoing talent shortage, particularly in engineering roles following the war, remains a challenge. Despite this, our portfolio companies have shown remarkable resilience, consistently meeting customer demands and expanding into key markets such as the U.S. and Europe, where most of the cybersecurity and defense clients are based.
How will new American leadership affect the global high-tech industry or economy? And where does this place Israel and its entrepreneurs?
Elron Ventures’ controlling shareholder, Arieli Group, is headquartered in the United States. This marks an important step forward for our entrepreneurs with our deep expertise in product-market fit and extensive network of U.S. customers, partners, and investors. This transition is pivotal, creating new opportunities for growth and collaboration. We leverage our international presence to help our portfolio companies scale and grow. Since 1962, Elron has had a legacy of collaboration with top players in the VC/ PE ecosystem and we strongly believe in continuing to foster a culture of collaboration.
What are the three most important things the Israeli government should do today to accelerate the high-tech engine in the coming year?
To accelerate the high-tech engine, Israel needs to make investments today to ensure that companies will have strong and thriving workforces. This includes boosting early-stage growth and diversifying talent. Integrating non-engineers into tech roles, such as product management and sales, launching upskilling programs, and introducing students to technology at an earlier age can help boost the workforce.
Are there new sectors you see as relevant? Are there any fields you anticipate will weaken significantly in the coming year?
In 2025, Israel's high-tech sector will continue to thrive, with cybersecurity leading the way due to increasing global demand for AI-driven threat detection and zero-trust systems. The defense industry, bolstered by rising global defense budgets and evolving security needs, is set for continued expansion. Elron, together with its longstanding partnership with Rafael is well-positioned to invest in the companies at the cutting edge of deep tech, cyber, and defense. Additionally, renewable energy, particularly in energy storage and infrastructure, will attract substantial investment.
Is Israel missing out on the AI revolution in the global arms race? If not, what should the local industry focus on to join the global race?
We are in an AI marathon, and startups that fail to integrate AI solutions in any sector will struggle to remain relevant in the coming years. Israel is already a significant player in this revolution, consistently ranking among the top 10 countries for AI innovation. Israeli companies are successfully applying AI in defense and cybersecurity to enhance advanced threat detection, autonomous decision-making, and real-time data analysis. However, to maintain its competitive edge, the local industry must address challenges such as workforce shortages and inadequate infrastructure.
Could the global IPO drought end in the coming year?
A recovery in the IPO market is highly likely in 2025 with a rebound expected to drive the reopening of IPO opportunities, contingent on stabilizing interest rates and improved investor confidence. Recent events in the Middle East and new leadership in the United States may lead to increased investor optimism and a renewed willingness for private companies to enter the public markets. Historically, the longest stretch between peaks in US IPO activity over the past 40 years has been three years. The end of 2024 will mark the end of the third year, creating optimism among investors.
From an investor's perspective: will the coming year be better for early-stage startups or more mature companies?
Mature companies will likely see more favorable conditions in 2025 due to stability and market recovery, appealing to investors seeking proven models and strategic exits. However, early-stage startups could still attract selective interest if they demonstrate strong product-market fit and capital efficiency.
Did you raise fund money in 2024 for an existing fund or a new one? What are your expectations regarding this matter for 2025?
We have sufficient capital to invest in new pipelines and make follow-on investments in our existing portfolio companies. Raising additional funds is not a concern; our primary focus is on executing key milestones, driving both top and bottom-line results, and developing growth strategies for our portfolio companies.
Investor trust will grow as they witness our successful execution and continue to have confidence in our transparency.
How many investments did you make in 2024, and how does it compare to previous years?
In 2024, Elron completed multiple follow-on investments in existing companies and is currently looking at new investment opportunities in our pipeline in cyber, defense, and B2B software.
In September 2024, Arieli Group acquired a controlling stake in Elron Ventures. Since the acquisition, there have been two exits.
Provide an example of an intriguing investment you made in 2024. What sets this company apart, or what is distinctive about its sector?
Name: Wonder Robotics
Sector: Autonomous drone landing systems, applicable to civilian and defense markets.
Distinctive Factors: Dual-market focus, innovative product-driven model, and strategic positioning in resilient tech.
Two notable companies that you think will thrive in 2025
Company: Red Access
Sector: Cybersecurity – Browsing Security
Description: Red Access offers an agentless Browsing Security platform that secures all browsing activities across in-office and hybrid environments, supporting all browsers and devices while ensuring efficient workflows without disruption or change.
Total Investment Raised: $6M
Founded: 2021, headquartered in Tel Aviv
Why this is their year: 2025 marks a pivotal year for Red Access as remote work becomes the global standard and the hybrid workforce continues to rise. With its agentless Browsing Security platform, supporting all browsers and devices, Red Access eliminates change management and ensures secure, efficient workflows, positioning itself as a leader in browsing security for the modern, flexible workforce.
Company: Tamnoon
Sector: Cybersecurity - Managed Cloud Security
Description: Enabling security teams to predictably, reliably, and efficiently optimize their cloud security posture while minimizing the impact on their environment.
Total Investment Raised: $18M
Founded: 2021, headquartered in Silicon Valley
Why this is their year: 2025 marks a pivotal year for Tamnoon as AI-driven cloud attacks escalate and CNAPP consolidates the cloud security stack. With its unique blend of Human Intelligence and AI-driven remediation, Tamnoon stands out as the trusted partner for closing critical security gaps and leading the way in managed cloud threat exposure and remediation.
