Israel's Secret Weapon? How Defense Tech is Exploding!

Good afternoon. I'm Amy Shapiro, Good afternoon. I'm Amy Shapiro, journalist at CEK, and we're here today journalist at CEK, and we're here today journalist at CEK, and we're here today at Mind the Tech London 2025. We're at Mind the Tech London 2025. We're at Mind the Tech London 2025. We're joined by Limo Ganot, uh, partner at joined by Limo Ganot, uh, partner at joined by Limo Ganot, uh, partner at Geffin Capital. Lemo, thank you so much Geffin Capital. Lemo, thank you so much Geffin Capital. Lemo, thank you so much for joining us. It's my pleasure. Thank for joining us. It's my pleasure. Thank for joining us. It's my pleasure. Thank you for having me. Oh, it's a pleasure you for having me. Oh, it's a pleasure you for having me. Oh, it's a pleasure to have you. So, to start off with, can to have you. So, to start off with, can to have you. So, to start off with, can you tell us a bit about yourself and you tell us a bit about yourself and you tell us a bit about yourself and what it is you do at Geffin Capital and what it is you do at Geffin Capital and what it is you do at Geffin Capital and a bit about Geffin Capital itself? Yes, a bit about Geffin Capital itself? Yes, a bit about Geffin Capital itself? Yes, happy to. So, Geffen Capital is a USI

happy to. So, Geffen Capital is a USI happy to. So, Geffen Capital is a USI investment fund. We invest in Israeli investment fund. We invest in Israeli investment fund. We invest in Israeli startups. Uh we are two partners in startups. Uh we are two partners in startups. Uh we are two partners in Israel, two partners in the US. We focus Israel, two partners in the US. We focus Israel, two partners in the US. We focus mainly on Israeli companies that view mainly on Israeli companies that view mainly on Israeli companies that view the US as their major target market. We the US as their major target market. We the US as their major target market. We have a very strong network there. So we have a very strong network there. So we have a very strong network there. So we have help our companies penetrate the US have help our companies penetrate the US have help our companies penetrate the US market and grow there. And uh it's it's market and grow there. And uh it's it's market and grow there. And uh it's it's it's specifically an interesting time it's specifically an interesting time it's specifically an interesting time now for such investments and such uh now for such investments and such uh now for such investments and such uh access to the US market. I think it's access to the US market. I think it's access to the US market. I think it's it's becoming even more and more it's becoming even more and more it's becoming even more and more important to be able to open doors there important to be able to open doors there important to be able to open doors there because it's not so trivial for Israeli because it's not so trivial for Israeli because it's not so trivial for Israeli companies to companies to companies to >> to go and and and offer their services >> to go and and and offer their services >> to go and and and offer their services and products in the US right now.

and products in the US right now. and products in the US right now. >> That and it's something I want to touch >> That and it's something I want to touch >> That and it's something I want to touch on in a bit. But I think start off with on in a bit. But I think start off with on in a bit. But I think start off with one sector that I'd love to uh that ask one sector that I'd love to uh that ask one sector that I'd love to uh that ask you about is is defense tech because I you about is is defense tech because I you about is is defense tech because I understand Geffin Capital has two understand Geffin Capital has two understand Geffin Capital has two investments there. Do you think that investments there. Do you think that investments there. Do you think that this sector is is going to grow? Yeah. this sector is is going to grow? Yeah. this sector is is going to grow? Yeah. So I mean it's we we we are a So I mean it's we we we are a So I mean it's we we we are a diversified fund. So we invest uh we diversified fund. So we invest uh we diversified fund. So we invest uh we have investments in our enterprise have investments in our enterprise have investments in our enterprise software, robotics, digital health and software, robotics, digital health and software, robotics, digital health and also two investments in defense tech. also two investments in defense tech. also two investments in defense tech. >> I think that these two investments in >> I think that these two investments in >> I think that these two investments in defense tech are completely different defense tech are completely different defense tech are completely different from any other investment that we've from any other investment that we've from any other investment that we've made. Uh it's it's a very it's you have made. Uh it's it's a very it's you have made. Uh it's it's a very it's you have to be it's a very specific sector with to be it's a very specific sector with to be it's a very specific sector with very specific characteristics very specific characteristics very specific characteristics >> and these character characteristics are >> and these character characteristics are >> and these character characteristics are actually changing. So if I go back two, actually changing. So if I go back two, actually changing. So if I go back two, three years ago when we first invested,

three years ago when we first invested, three years ago when we first invested, I think that we saw two main challenges I think that we saw two main challenges I think that we saw two main challenges in defense tech, the first challenge was in defense tech, the first challenge was in defense tech, the first challenge was the sales cycles. They're very long. the sales cycles. They're very long. the sales cycles. They're very long. >> You it's a B2G play. You don't only sell >> You it's a B2G play. You don't only sell >> You it's a B2G play. You don't only sell to governments, you also sell to armies. to governments, you also sell to armies. to governments, you also sell to armies. When you sell to armies, you have When you sell to armies, you have When you sell to armies, you have additional layers of complexity which additional layers of complexity which additional layers of complexity which you don't usually face as a as a you don't usually face as a as a you don't usually face as a as a startup. I'll give you an example. One startup. I'll give you an example. One startup. I'll give you an example. One of our portfolio companies is selling to of our portfolio companies is selling to of our portfolio companies is selling to the US military, the US army. So you had the US military, the US army. So you had the US military, the US army. So you had you had we had to establish a proxy you had we had to establish a proxy you had we had to establish a proxy board in the US with US citizens because board in the US with US citizens because board in the US with US citizens because you cannot have an Israeli board of a in you cannot have an Israeli board of a in you cannot have an Israeli board of a in a company that sells to the US army. a company that sells to the US army. a company that sells to the US army. Just you know just a kind of a taste of Just you know just a kind of a taste of Just you know just a kind of a taste of the additional complexities that you the additional complexities that you the additional complexities that you have. And so one is actually long sales have. And so one is actually long sales have. And so one is actually long sales cycles because you're selling to cycles because you're selling to cycles because you're selling to government, you're selling to armies and government, you're selling to armies and government, you're selling to armies and you have so many additional um you have so many additional um you have so many additional um regulations that you have to apply with. regulations that you have to apply with. regulations that you have to apply with. And the second challenge is for And the second challenge is for And the second challenge is for investors. investors. investors. >> Usually defense tech companies were >> Usually defense tech companies were >> Usually defense tech companies were valued based on EBIDA multiples. Now valued based on EBIDA multiples. Now valued based on EBIDA multiples. Now Ebida multiples are not what you we're Ebida multiples are not what you we're Ebida multiples are not what you we're used to. I mean when a company grows and used to. I mean when a company grows and used to. I mean when a company grows and grows fast then you usually look at grows fast then you usually look at grows fast then you usually look at revenue multiples. You look at much revenue multiples. You look at much revenue multiples. You look at much higher valuations. the these were the higher valuations. the these were the higher valuations. the these were the two challenges that I think the industry two challenges that I think the industry two challenges that I think the industry faced about 2 three years ago. I think faced about 2 three years ago. I think faced about 2 three years ago. I think that the landscape today is very much

that the landscape today is very much that the landscape today is very much different. I think that right now we're different. I think that right now we're different. I think that right now we're seeing two major changes versus the seeing two major changes versus the seeing two major changes versus the challenges that I described. The first challenges that I described. The first challenges that I described. The first is that sales cycles are much shorter is that sales cycles are much shorter is that sales cycles are much shorter because you have so many because of the because you have so many because of the because you have so many because of the and and the the geopolitical instability and and the the geopolitical instability and and the the geopolitical instability and the crisis that we're facing I think and the crisis that we're facing I think and the crisis that we're facing I think across the world. Then you have you have across the world. Then you have you have across the world. Then you have you have countries and you have governments and countries and you have governments and countries and you have governments and and and armies which are um grow their and and armies which are um grow their and and armies which are um grow their demand is growing tremendously. They're demand is growing tremendously. They're demand is growing tremendously. They're investing so much more in defense in investing so much more in defense in investing so much more in defense in general and in defense tech general and in defense tech general and in defense tech specifically. specifically. specifically. >> So sales cycles are much shorter now and >> So sales cycles are much shorter now and >> So sales cycles are much shorter now and companies are growing much faster now. companies are growing much faster now. companies are growing much faster now. So this also changes the other challenge So this also changes the other challenge So this also changes the other challenge that I addressed earlier and that was that I addressed earlier and that was that I addressed earlier and that was the multiples. instead of looking at the multiples. instead of looking at the multiples. instead of looking at eBida multiples, we're actually looking eBida multiples, we're actually looking eBida multiples, we're actually looking at revenue multiples, which makes at revenue multiples, which makes at revenue multiples, which makes investments much more interesting and investments much more interesting and investments much more interesting and much more lucrative for investors. So, much more lucrative for investors. So, much more lucrative for investors. So, kind of to summarize, I think that um

kind of to summarize, I think that um kind of to summarize, I think that um right now you can find really right now you can find really right now you can find really interesting investment opportunities in interesting investment opportunities in interesting investment opportunities in defense tech. But I but I would look at defense tech. But I but I would look at defense tech. But I but I would look at companies that mature within three to companies that mature within three to companies that mature within three to five years because shortterm, five years because shortterm, five years because shortterm, medium-term, I still think that the medium-term, I still think that the medium-term, I still think that the trends and the tailwinds that these trends and the tailwinds that these trends and the tailwinds that these companies are enjoying right now will companies are enjoying right now will companies are enjoying right now will continue. But I'm not sure that it's continue. But I'm not sure that it's continue. But I'm not sure that it's going to be for the long term. going to be for the long term. going to be for the long term. >> Okay. And and in terms of other

>> Okay. And and in terms of other >> Okay. And and in terms of other challenges and and opportunities looking challenges and and opportunities looking challenges and and opportunities looking at the Israeli uh high-tech sector, uh at the Israeli uh high-tech sector, uh at the Israeli uh high-tech sector, uh what do you see on the horizon and how what do you see on the horizon and how what do you see on the horizon and how are you as an investor preparing are you as an investor preparing are you as an investor preparing preparing for them? I think that the the preparing for them? I think that the the preparing for them? I think that the the opportunities are across the board in opportunities are across the board in opportunities are across the board in Israel. I think we continue to innovate. Israel. I think we continue to innovate. Israel. I think we continue to innovate. We continue to be leaders in so many We continue to be leaders in so many We continue to be leaders in so many industries. So I think that we have so industries. So I think that we have so industries. So I think that we have so many we have a lot of challenges. I many we have a lot of challenges. I many we have a lot of challenges. I think that the that Israel's um Israel think that the that Israel's um Israel think that the that Israel's um Israel is is is in a in in a bit from from a is is is in a in in a bit from from a is is is in a in in a bit from from a political perspective is in in a bit of political perspective is in in a bit of political perspective is in in a bit of a difficult situation, but I think that a difficult situation, but I think that a difficult situation, but I think that as Yo just mentioned earlier today, the as Yo just mentioned earlier today, the as Yo just mentioned earlier today, the Israeli high-tech is a bit, you know, is Israeli high-tech is a bit, you know, is Israeli high-tech is a bit, you know, is is not as affected as we would have is not as affected as we would have is not as affected as we would have expected when it comes to Israeli expected when it comes to Israeli expected when it comes to Israeli companies that are offering their uh companies that are offering their uh companies that are offering their uh solutions and and products uh globally. solutions and and products uh globally. solutions and and products uh globally. But I do believe that the trends that we

But I do believe that the trends that we But I do believe that the trends that we will see are uh Israeli companies will see are uh Israeli companies will see are uh Israeli companies unfortunately uh establishing US unfortunately uh establishing US unfortunately uh establishing US entities. That's unfortunately something entities. That's unfortunately something entities. That's unfortunately something that I'm seeing with our portfolio that I'm seeing with our portfolio that I'm seeing with our portfolio companies and I think that that is companies and I think that that is companies and I think that that is something something something >> that I would I would very much hope not >> that I would I would very much hope not >> that I would I would very much hope not to see in the in the long term. Well, it

to see in the in the long term. Well, it to see in the in the long term. Well, it kind of leads to my final question which kind of leads to my final question which kind of leads to my final question which is like uh uh Gavin Capital is a is like uh uh Gavin Capital is a is like uh uh Gavin Capital is a US-Israeli fund. So I think you have an US-Israeli fund. So I think you have an US-Israeli fund. So I think you have an interesting perspective on how uh the interesting perspective on how uh the interesting perspective on how uh the American leadership is affecting uh the American leadership is affecting uh the American leadership is affecting uh the global high-tech industry and then also global high-tech industry and then also global high-tech industry and then also how that kind of positions Israeli how that kind of positions Israeli how that kind of positions Israeli entrepreneurs. Yeah, I think that I mean

entrepreneurs. Yeah, I think that I mean entrepreneurs. Yeah, I think that I mean looking at the US is it's a very it's a looking at the US is it's a very it's a looking at the US is it's a very it's a it's a very general uh you know it's a very general uh you know it's a very general uh you know statement. I think that the US is so statement. I think that the US is so statement. I think that the US is so different. Every every state there is is different. Every every state there is is different. Every every state there is is a completely different universe. So it a completely different universe. So it a completely different universe. So it depends where where you know where you depends where where you know where you depends where where you know where you uh operate. I think that when we look at uh operate. I think that when we look at uh operate. I think that when we look at more Republican companies uh from a more Republican companies uh from a more Republican companies uh from a political perspective, I think that political perspective, I think that political perspective, I think that there is a lot of support for Israel, there is a lot of support for Israel, there is a lot of support for Israel, you look at other states, there is a bit you look at other states, there is a bit you look at other states, there is a bit less support for Israel. So, I think less support for Israel. So, I think less support for Israel. So, I think it's very it's the sentiment is mixed it's very it's the sentiment is mixed it's very it's the sentiment is mixed and it's very difficult now to say that and it's very difficult now to say that and it's very difficult now to say that it's going, you know, that it's positive it's going, you know, that it's positive it's going, you know, that it's positive or negative. But, but I think it or negative. But, but I think it or negative. But, but I think it definitely is something that needs to be definitely is something that needs to be definitely is something that needs to be taken into consideration when you decide taken into consideration when you decide taken into consideration when you decide how to approach the US market as an how to approach the US market as an how to approach the US market as an Israeli company. Israeli company. Israeli company. >> Well, thank you so so much for your >> Well, thank you so so much for your >> Well, thank you so so much for your time. It was very interesting talking to time. It was very interesting talking to time. It was very interesting talking to you today and I hope you enjoy the rest you today and I hope you enjoy the rest you today and I hope you enjoy the rest of your day here at Mind the Tech of your day here at Mind the Tech of your day here at Mind the Tech London. London. London. >> Thank you so much and same here.