Devastation Into Dollars: Israeli Startups Are Making a Killing in Gaza

Israeli startups are cashing in on Gaza’s destruction, using the ongoing conflict to showcase and sell their cutting-edge military technologies to a global market.

Despite calls across college campuses demanding divestment from Israel, one sector of the Israeli economy appears to be booming. Israeli startups raised over $1 billion in funding for the second straight month in May.

A number of these successful startups have participated in Israel’s ongoing war on the besieged Gaza Strip, suggesting genocide is a lucrative marketing tool for business. Products like suicide drones, smart guns, and robot dogs have all been deployed on the battlefield since October 2023, with some startups even exploiting the war to their advantage and touting their technologies’ use in the war as an advertising boost.

Israel’s government-owned and private companies alike have long promoted their weapons as “battle-tested,” with the occupation of Gaza and the West Bank serving as Israel’s homegrown weapons-testing laboratory.

“It’s just one example, and there are so many more, of Israel not wanting to ‘waste’ the opportunity in Gaza to show off its military hardware to an excited global market,” Antony Loewenstein, author of The Palestine Laboratory, a book on Israeli weapons exports around the world, wrote in the April 3, 2024 edition of his newsletter.

Hamas’ October 7, 2023 attack exposed Israel’s once-renowned cyber tech capabilities. Whereas such a massive oversight would presumably collapse any other industry, the opposite appears to be happening as Israel’s genocide overshadows the October attack.

“Despite this colossal failure of the intelligence agencies, the wholesale destruction of Gaza and the kinds of weapons Israel’s using will only increase the sales,” Neve Gordon, human rights and international law professor at the Queen Mary University of London, told MintPress News.

 

The Dark Side of Innovation

Israel is rapidly becoming a pariah state on the world stage, as its assault on Gaza has killed more than 36,000 Palestinians thus far and created a manufactured famine. Yet while the International Criminal Court issues arrest warrants for Israeli leaders and countries pulling their ambassadors from Israel, defense industries are eyeing the same Israeli weapons that have wreaked such unfathomable destruction and death.

“This industry is in the business of killing,” Gordon said. “So what we find appalling, they find exciting.”

These weapons have been used to carry out egregious violations of international law, including war crimes, crimes against humanity, and even genocide, and buyers are saying, ‘That’s wonderful. These things work. This is what spurs sales.”

Israel touts its “battle-tested” technology and the revolving door relationship of its military, tech, and education sectors. Roughly 80% of Israeli cyber tech firms were founded by graduates of Shin Bet’s (Israeli security agency) Unit 8200, an intelligence corps infamous for its clandestine spying operations against Palestinians.

Israeli universities work with the Ministry of Defense to conduct research activities and cater programs like the Academic Reserves (Atuda), Talpiot programs, and Havatzalot Program to the Israeli military. Tech giants like IBM also strategically set up cyber research centers near military bases as part of the Defense Ministry’s initiative to funnel veterans into the high-tech industry.

Nicknamed the “startup nation,” Israel has one of the highest numbers of startups per capita worldwide — primarily bolstered by the government’s substantial investment in startups and technology. Startups are the backbone of Israel’s economy, so when they flourish, so does the state.

“All these companies are more or less under the radar,” Jeff Halper, author of “War Against the People,” a book on Israel’s arms and surveillance technology industries, told MintPress News, noting the Palestinian-led Boycott, Divestment and Sanctions movement should be targeting Israeli defense tech startups.

There is some hesitation to invest now in Israeli startups, but it’s not a fatal blow mainly because this is fairly secret stuff, and it’s not exposed very much in the public.”

Listed below are the startups whose products are being used in Israel’s war on Gaza.

 

Xtend

Xtend secured $40 billion in funding after touting its success in the war against Gaza, where its drones have dropped grenades, surveyed tunnels, and attacked Palestinians. The Israeli military is using its signature Wolverine combat drone in Gaza to gather intelligence on buildings. Equated to operating a video game, the drone is equipped with a robotic arm and virtual reality goggles.

According to monitoring groups, Statewatch and Informationsstelle Militarisierung, Xtend received a multi-billion research and innovation grant from the European Union to study the optimizing capabilities of its Skylord Xtender drone system and find suitable partners for producing and commercializing the technology.


In its latest financing round, investors include Tel-Aviv-based investment firm Claltech, a large unnamed Japanese financing corporation, and previous investors like the Chartered Group, a Japanese-Singapore investment company headed by Israeli businessman Eyal Agmoni.

The company’s customers include the United States Department of Defense, BP, and Hyundai (which use drones to monitor their pipelines for potential issues), and it has partnered with the Canadian and United Kingdom defense ministries. Its investors include TAU Ventures, Tel Aviv University’s venture capital firm.

 

SmartShooter

Known for developing an AI-powered gun installed at a checkpoint in the West Bank city of al-Khalil (Hebron), SmartShooter has now developed the Smash system in Gaza, which utilizes “smart sight” to precisely track moving targets. In November, an Israeli special forces unit used the system to target homes near a school in the Shati refugee camp in Gaza.

SmartShooter equipment is also used by the British, German, and U.S. militaries.

 

infiniDome

This Israeli startup produces GPS protection and navigation systems for drones patrolling the Gaza border. With investment from U.S.-based Honeywell Aerospace Technologies, the company will soon be able to support the U.S. Department of Defense and South Korean and Indian armies. It also recently established a U.S. subsidiary to serve the U.S. defense industry.

 

D-Fend Solutions

To disrupt drones sent by Hamas and Hezbollah, the Israeli military is using the Israeli firm’s D-Fend Solutions counter-drone technology. Their products are also used by the U.S. Departments of Defense, Justice, and Homeland Security and the United Arab Emirates security agencies.

 

Spear UAV

This Israeli startup developed a Viper suicide drone that can be launched from a portable capsule by a soldier or armored vehicle and is intended to locate, track, and attack targets by crashing into them and self-destructing. Since the war, the company says it has accelerated development to meet the demands of the Israeli military.

 

Axon Vision

As international headlines have noted, artificial intelligence is fully immersed in Israel’s war on Gaza. While the Israeli military develops some, other AI tools originate in the Israeli startup hub, like Axon Vision, whose products are being used in Israel’s ground invasion of Gaza. Edge360, Axon Vision’s AI camper system, is installed in armored vehicles in Gaza to assist soldiers in detecting threats and making decisions on the ground.

“One of the advantages we have here in Israel with the Israeli army is that we have close relationship,” CEO Roy Riftin boasted of the company’s tight-knit collaboration with the Israeli military in an interview with Nikkei. “We get feedback all the time.”

Riftin added his company is currently conducting market research with the hope of exporting the technology.

 

Steadicopter

The Steadicopter Black Eagle, an unmanned robot helicopter, is being used for intelligence gathering in Gaza. The Israel startup has been around for decades, working with companies in Africa, the UAE and pitching to the U.S. Army.

 

NextVision

This Israeli startup manufactures cameras for weapons systems, specifically on drones made by Israel’s top arms companies like Elbit Systems, Israel Aerospace Industries, and Rafael Advanced Defense Systems — all used in Israel’s assault on Gaza. The Israeli military also uses its cameras.

With NextVision’s CEO stating, “Wars are good for business,” the startup has experienced an increase in sales since the war on Gaza began in 2023. In the war’s first month, NextVision’s sales rate doubled.

NextVision operates worldwide, with customers in Asia, Europe, the UK, Canada, the U.S., Mexico, and South America. Europe is its largest market.

 

Asio Technologies

Soldiers are using Asio Technologies’s AI navigation systems in Gaza. The Orion platform, developed by Asio, uses augmented reality and three-dimensional viewing to identify potential threats. The AeroGuardian NOCTA optical navigation system, another Asio invention, is a vision-based navigation tool for drones.

News reports say the company will improve its technology based on lessons learned from the war and hopes to export it abroad. Without disclosing the country, Asio Technologies’ CEO David Harel said an Asian country expressed interest in Orion.

The company also works with militaries in North America and Asia and unnamed U.S. defense customers.

 

Robotican

Animal-like robots are being deployed in the war on Gaza. The Rooster, jointly developed by Israeli startup Robotican and the Israeli Defense Ministry, is a drone inside a wheeled cage. The Rooster drones are attached to Vision 60 robot dogs made by the Philadelphia-based Ghost Robotics. The Israeli reserves organization Brother in Arms donated the first three devices to the Israeli military. Not in any way friendly, the robodogs are equipped to shoot and are primarily used to surveil buildings and tunnels inside Gaza.

Robotican is also developing the “Angry Birds” drone, which is meant to take down other drones, specifically for use in populated areas where neutralizing them may not be an option.

In addition to Ghost Robotics, Robotican has partnered with international arms distributors for police and military forces like Guardian Defense & Homeland Security in Spain, Messer Waffenhandel in Germany, Viking in the UK, and FLYMOTION in the U.S.  It has also expanded its market to Scandinavia with its collaboration with Northcom, a communication solutions company operating in Sweden, Norway, Denmark, and Finland, to promote its Rooster Drone in Nordic countries.

Robotican also presented its Rooster drone to New York City Mayor Eric Adams in 2023, writing, “We believe that the Rooster is a vital product and tool for the public safety and first responders of New York City.”

 

Corsight

Jointly owned by Israeli company Cortica and Canadian venture capital firm Awz Ventures, Corsight uses AI facial recognition technology to collect information about Palestinians in Gaza.

According to the New York Times, Israeli soldiers have set up checkpoints along routes where Palestinians have fled Israeli bombing and combat operations and scan Palestinians passing through using cameras equipped with Corsight’s facial recognition application. Meant to identify members of Hamas — specifically those who participated in the October 7 attacks — the program has created a database of Palestinians without their knowledge or consent.

In several instances, the Corsight application mistakenly identified a person as a Hamas member, like Palestinian poet Mosab Abu Toha, who was taken from a Gaza checkpoint and detained, beaten, and interrogated by Israeli officers for two days before being returned to Gaza.

Corsight’s technology is being used at airports and law enforcement authorities worldwide, such as the police forces in Thailand, Mexico, Brazil, Colombia, and the EU. Australian and UK police forces are piloting its product. Gold producer Sibanye Stillwater in South Africa also uses it.

Israel’s genocidal assault in Gaza couldn’t reach the degree it has without the advanced weaponry it’s creating. On the one hand, Israel’s economic dependence on defense technology stagnates peace efforts and damages its international relationships when its technologies aid Israel’s human rights abuses. Yet, on the other, Israel’s economy thrives on war and occupation.

“Israel tends to be kind of immune from sanctions or from people not wanting to buy their products because of Gaza because the technologies are so useful for governments, especially repressive governments,” Halper said.

So, while diplomatically, Israel may be shunned in staterooms around the world, it’s only becoming more and more attractive to decision-makers in war rooms and military brass on the battlefield.

Feature photo | Illustration by MintPress News

Jessica Buxbaum is a Jerusalem-based journalist for MintPress News covering Palestine, Israel, and Syria. Her work has been featured in Middle East Eye, The New Arab and Gulf News.