Key Takeaways
- • Israel's Ministry of Finance and Ministry of Defense selected Adir Capital and SLING Capital as tender winners to establish state-backed venture capital funds focused on advanced defense technologies, addressing a documented shortage of venture capital in high-risk, capital-intensive security sectors.
- • The two funds will raise private capital for Israeli defense startups and companies while benefiting from state guarantees, positioning them to support critical supply chain development and strengthen Israel's technological and industrial independence amid ongoing geopolitical pressures.
- • The selection was overseen by a committee chaired by Gil Cohen, Senior Deputy Accountant General and Director of the Financing Division, following a formal tender process managed jointly by the Ministry of Finance's Accountant General's Division and the Ministry of Defense's MAFAT (Administration for Research and Development of Weapons and Technological Infrastructures).
- • Both funds are expected to complete investor recruitment and commence operations in coming months, integrating private capital markets with Israel's defense establishment and broader technology ecosystem to accelerate development of next-generation defense capabilities.
- • The initiative directly targets job creation and economic growth while mitigating investment risk in defense-tech sectors that historically faced capital constraints due to production requirements, regulatory complexity, and geopolitical uncertainty.
Summary
Israel's Ministry of Finance and Ministry of Defense have announced the selection of Adir Capital and SLING Capital as winners of a competitive tender to establish venture capital funds dedicated to advanced defense technologies. The selection was formally announced by the Accountant General's Division at the Ministry of Finance and MAFAT, the Ministry of Defense's Administration for Research and Development of Weapons and Technological Infrastructures. Adir Capital is affiliated with Idan Financial Instruments, while SLING Capital is based in Giza.
The tender process was overseen by a committee headed by Gil Cohen, Senior Deputy Accountant General and Director of the Financing Division. The selection of these two firms represents a strategic pivot by Israel's government to connect its defense establishment, private capital, and broader technology ecosystem. According to the ministries, the funds will operate with state guarantees backing their investments, enabling them to raise private capital while mitigating the heightened risk profile associated with defense-technology ventures.
The stated objectives of the funds include strengthening Israel's technological, industrial, and security independence; developing critical supply chains; and supporting economic growth and job creation. The government explicitly identified a shortage of venture capital dedicated to security-related fields as a key market failure the initiative addresses. This gap has been exacerbated by the high production requirements, significant capital demands, and investment risks inherent in defense-technology development, particularly amid current wartime conditions and broader geopolitical volatility. The state-guarantee mechanism is designed to attract institutional and private investors who might otherwise avoid the sector due to these structural challenges.
The two selected funds are now in the recruitment phase and will work to secure private capital commitments before commencing operations. This hybrid model—combining state guarantees with private capital and professional venture management—positions Israel to accelerate the commercialization and scaling of domestic defense-technology innovations while maintaining strategic control over critical capabilities and supply chains.
The tender process was overseen by a committee headed by Gil Cohen, Senior Deputy Accountant General and Director of the Financing Division. The selection of these two firms represents a strategic pivot by Israel's government to connect its defense establishment, private capital, and broader technology ecosystem. According to the ministries, the funds will operate with state guarantees backing their investments, enabling them to raise private capital while mitigating the heightened risk profile associated with defense-technology ventures.
The stated objectives of the funds include strengthening Israel's technological, industrial, and security independence; developing critical supply chains; and supporting economic growth and job creation. The government explicitly identified a shortage of venture capital dedicated to security-related fields as a key market failure the initiative addresses. This gap has been exacerbated by the high production requirements, significant capital demands, and investment risks inherent in defense-technology development, particularly amid current wartime conditions and broader geopolitical volatility. The state-guarantee mechanism is designed to attract institutional and private investors who might otherwise avoid the sector due to these structural challenges.
The two selected funds are now in the recruitment phase and will work to secure private capital commitments before commencing operations. This hybrid model—combining state guarantees with private capital and professional venture management—positions Israel to accelerate the commercialization and scaling of domestic defense-technology innovations while maintaining strategic control over critical capabilities and supply chains.
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