- Israeli VC market maturing in deep tech investments.
- Cybersecurity expected to retain its dominance by 2030.
- AI infrastructure and defense tech are on the rise.
- Innovation and resilience are key to Israeli startup success.
In a candid discussion with CTech, Zack Fagan, a partner at Earth and Beyond Ventures, offered a compelling outlook on Israel's dynamic tech ecosystem. From the challenges of funding high-capex deep tech to the enduring reign of cybersecurity, Fagan provided expert insights into the forces shaping the "Startup Nation's" future.
The conversation began with a critical question: are Israeli VCs truly equipped to fund high-capex deep tech ventures? Fagan acknowledged the historical focus on software due to its lower entry barriers but noted a significant shift. "The Israeli market is becoming more mature when it looks at deep tech investments," he stated, highlighting a global recognition of deep tech as a "very compelling investment space." His firm, Earth and Beyond, actively invests in this sector at the pre-seed stage, yet Fagan identified a crucial "bridging round" gap in the market, where growth-stage deep tech companies struggle to secure funding before becoming established entities. He expressed optimism that this gap is slowly closing.
Shifting focus to Israel's dominant tech exports, Fagan was asked what might dethrone cybersecurity by 2030. His response was unequivocal: "To be honest, I don't see anything dethroning cyber by 2030. It's only, you know, 3 years away." While cyber is set to maintain its lead, Fagan pointed to other sectors poised for significant growth. He specifically mentioned "AI infrastructure" and the broader "deep tech and resilience space," encompassing areas like semiconductors and defense, as key trends moving upwards.
The discussion concluded with an exploration of Israel's core narrative on the global stage: is it primarily about innovation or extreme resilience? Fagan eloquently argued that these two qualities are intrinsically linked. "I think that they're essentially one and the same," he asserted. He elaborated that the remarkable success of Israeli startups stems not just from their capacity for groundbreaking innovation, but equally from their inherent resilience – their ability to "push forward, how to overcome uh major challenges and succeed despite uh despite the odds." This dual strength, he emphasized, is the true hallmark of the Israeli tech phenomenon.
“It's not just that Israeli companies are very good at innovating. It's that they're resilient. they understand how to push forward, how to overcome uh major challenges and succeed despite uh despite the odds.”
- Zack Fagan, Partner at Earth & Beyond Ventures
