The growing importance of technology-driven military solutions has fundamentally transformed modern warfare, where agility, precision, and rapid deployment have become the cornerstones of success. The recent involvement of Israeli startup Xtend in tracking and targeting Hamas leader Yahya Sinwar with their cutting-edge drones offers a stark example of how small, innovative companies are shaping the battlefield. Xtend’s drones, which combine artificial intelligence (AI) and high-precision capabilities, are revolutionizing the way military operations are carried out. This rise of agile startups, particularly in Israel, is a manifestation of a broader trend where defense ministries increasingly turn to smaller firms for advanced military technology, bypassing traditional defense manufacturers. This shift highlights several important developments in the world of modern defense technology, including the role of artificial intelligence, the agility of startups, and the growing significance of international collaborations.

Xtend’s drones, which integrate AI to conduct high-precision strikes, operate with minimal human intervention and can be controlled remotely from distances of up to 9,000 kilometers. This technological breakthrough demonstrates the increasing reliance on automation and AI in warfare, where human operators are distanced from the immediate risks of combat, enabling more strategic decision-making. The drones’ ability to conduct strikes from such long distances exemplifies how technological advancements allow for precision that was once unimaginable, reshaping the very nature of conflict.

The Israeli Defense Forces (IDF), traditionally reliant on well-established defense manufacturers, have recognized the value in sourcing cutting-edge military technology from smaller, more nimble startups. This strategic pivot is driven by the need for rapid deployment and innovation, which large manufacturers often cannot provide quickly. As demonstrated during the October 7, 2023 attacks, Xtend’s rapid deployment of drones to assist in search and rescue operations highlights the critical need for such technology in times of crisis. Within a matter of hours, Xtend was able to deploy its drones to assess the situation and support the defense efforts, a testament to the agility that startups bring to the table.

This agility is not unique to Israel but is also evident in Ukraine, where similar startups have played a vital role in repelling larger Russian forces. Small, agile companies with a focus on rapid innovation have proven to be indispensable in conflicts where the time to develop traditional weapons systems can be a luxury. War creates an urgency for immediately deployable technology, and startups—often made up of small teams—are in a prime position to deliver fast and effective solutions. According to military expert Isaac Ben-Israel, startups are capable of turning out usable products in weeks, compared to the years required by traditional manufacturers. This rapid response capacity is crucial when conventional defense solutions are too slow to meet the demands of modern warfare.

Furthermore, Israel’s startup ecosystem has flourished during wartime, with companies like Xtend raising millions in funding and securing contracts with both domestic and international clients. In August 2023, Xtend raised $40 million in its second funding round, followed by an $8.8 million contract with the U.S. government. The return of Sequoia Capital, a major U.S. venture capital firm, to investing in Israeli startups after a hiatus since 2016 further emphasizes the increasing global recognition of Israel’s role in advancing defense technology. Sequoia’s involvement underscores how defense technology is no longer confined to traditional military giants but has expanded to encompass smaller, more dynamic companies that are well-positioned to innovate and scale quickly.

Israel’s high-tech sector, which is already a key pillar of its economy, has only grown more prominent during the ongoing conflict. High-tech industries in Israel account for 16% of the workforce and contribute to over half of the country’s exports, making it a vital part of the nation’s economic infrastructure. This burgeoning tech sector has attracted attention not only from Israel’s own defense ministry but also from international markets, as countries seek to bolster their own defense capabilities through partnerships with Israeli firms. The influx of international investment into Israeli startups, including the deal between Thirdeye Systems and the Emirati defense conglomerate EDGE, marks a shift in geopolitical dynamics, where former adversaries now collaborate in the field of defense technology.

The Israeli Defense Ministry has capitalized on this innovation by fast-tracking contracts with startups, providing them with a “green path” to expedite the approval process. Since the onset of the war, the Israeli Defense Ministry has awarded contracts totaling 782 million shekels ($219 million) to 101 startups and small companies. This collaboration has been vital in advancing new technologies that are directly applicable to the current conflict. A particularly notable example is the growing importance of anti-drone technologies, with over 50% of Israel’s anti-drone capabilities now coming from startups. This shift highlights the critical role of innovation in modern defense strategies, particularly as Israel faces a diverse array of threats, from Gaza to Hezbollah in Lebanon, and even Iran and the Houthis in Yemen.

In addition to the technological advancements, Israel’s military-industrial complex is increasingly interconnected with the global defense ecosystem. The first-ever Global DefenseTech conference, organized by Israel’s Directorate of Defense Research & Development (DDR&D), brought together dozens of startups and multinational corporations to explore new technologies. The event demonstrated Israel’s central role in the global defense technology market, with multinational companies such as Boeing Israel acknowledging Israel’s importance as a strategic partner. This international attention is a direct result of the innovations being developed by Israeli startups, which are becoming increasingly critical to shaping the battlefield of the future.

Companies like Thirdeye Systems, which specializes in advanced warning systems for attack drones, have seen significant growth during the war. The company, which had a few product lines before the conflict, now boasts seven-to-eight product lines and has secured major contracts with NATO countries as well as Israel. The company’s partnership with EDGE, a state-owned Emirati defense conglomerate, signals a rare instance of investment in Israeli defense technology by an Emirati firm. This partnership, contingent on approval from Israel’s Defense Ministry, could open new markets for Thirdeye Systems and further enhance Israel’s global influence in the defense sector.

The shift toward startups as key players in the defense sector highlights a broader transformation in the nature of modern warfare. Traditional defense contractors are increasingly being bypassed in favor of more nimble, innovative companies that can rapidly develop and deploy advanced technologies. This trend is likely to continue as the pace of technological advancement accelerates, with artificial intelligence, autonomous systems, and anti-drone technologies becoming central to future military operations. The ability of startups to respond quickly to the demands of warfare and to secure significant funding and contracts demonstrates the growing importance of innovation in the defense industry.

The role of Israeli startups, particularly Xtend, in reshaping military technology is a profound development in modern warfare. As global conflicts increasingly demand rapid technological solutions, the agility and innovation of startups are proving to be decisive factors. Israel’s focus on nurturing this sector, along with international collaborations and investments, positions the country as a global leader in defense technology, with implications for the future of warfare on a global scale. The trend of startups rising to prominence in defense is not limited to Israel but is likely to be seen in other countries as well, marking a new era of innovation-driven military strategy.

(Adapted from TechCrunch.com)