Dun & Bradstreet’s Duns 100 index published Israel’s first dedicated ranking of defense-tech companies this week, sorting 60 firms into six categories, from armor manufacturing to intelligence and cyber. Elbit Systems and five other incumbents anchor their categories, but 42 of the 60 slots, 70% of the list, belong to manufacturing and unmanned and autonomous systems alone.
The ranking landed the same month the Ministry of Defense chose to send a tenth of its 2026 research budget to startups instead of the sector’s three largest companies, and just weeks after those same startups pulled in triple last year’s entire investment total in six months. The index did not create that shift. It measured one already underway.
Duns 100 Sorts Israel’s Defense Industry Into Six Lanes
The six lanes Duns 100 drew are defense integrators, defense manufacturing, unmanned and autonomous systems, homeland security, intelligence and cyber, and tactical and ground equipment. Elbit Systems, Plasan Sasa, Aeronautics, Magal, Cellebrite and Israel Weapon Industries (IWI) were named as the leaders, one for each lane, a pairing that tracks each firm’s known specialty: Elbit as the broad systems integrator, Plasan Sasa in armor manufacturing, Aeronautics in drones, Magal in perimeter security, Cellebrite in digital forensics and IWI in small arms.
| Category | Named Leader | Share of the 60 |
|---|---|---|
| Defense Integrators | Elbit Systems | Not disclosed individually |
| Defense Manufacturing | Plasan Sasa | 23 companies (38%) |
| Unmanned and Autonomous Systems | Aeronautics | 19 companies (32%) |
| Homeland Security | Magal | Not disclosed individually |
| Intelligence and Cyber | Cellebrite | Not disclosed individually |
| Tactical and Ground Equipment | Israel Weapon Industries (IWI) | Not disclosed individually |
Sheila Zavaro Weiss, senior director at Duns 100, said the ranking captures a business no longer built only on hardware. The industry now creates value, she said, through the integration of industrial capability with software, data, AI, autonomy and sensors. According to Duns 100, the methodology blends business strength, technological innovation, global reach, position in the defense value chain and operational relevance, weighing firms against peers at a similar stage of development, criteria set by Dun & Bradstreet’s own economists.
Five Names Marked as Ones to Watch
Alongside the 60-firm ranking, Duns 100 created a separate prize this year, the Emerging Industry Leaders Award, for companies it says are positioned to shape where the sector goes next. Five companies won it.
- Aero Sentinel, named by Duns 100 without further public detail on its product line
- AIR VEV, also named without additional specifics disclosed
- Axon Vision, likewise recognized without a public breakdown of its work
- Kela AI, which builds open software letting Western militaries plug civilian AI, sensors and edge devices into military command systems
- XTEND, which builds the operating software behind swarms of autonomous drones and ground robots and recently completed a $70 million Series B round to scale production out of Tampa, Florida
Duns 100 said the five provide solutions central to modern battlefield transformation. It gave no further detail on what Aero Sentinel, AIR VEV or Axon Vision actually build, a reminder that the index is naming names faster than it is publishing specifics.
The Capital Already Moved Before the Ranking Landed
Money got there first. Figures presented at the Haifa DefenseTech Startups and Investors Forum, hosted by HiCenter Ventures, Gornitzky GNY and EY, show just how fast.
- $3 billion raised by Israeli defense-tech startups working with the Ministry of Defense in the first six months of 2026
- Three times the total amount those same startups raised in all of 2025
- 30% of the $8.4 billion in private investment across Israel’s entire tech sector went to defense-tech and dual-use companies in that period
- 800 Israeli startups are currently fulfilling direct procurement orders for the ministry
Lior Hanuka, chief executive of HiCenter Ventures, said valuations are climbing fastest for the software and AI layered on top of the hardware, pointing to battlefield operating systems, encrypted cloud communications and autonomous drone and robot software as the categories drawing the richest terms. Ilana Averkin, head of defense-tech at HiCenter Ventures, put the shift in three words: Israel is moving from a Cyber Nation to a Defense-Tech Nation.
Elbit, IAI and Rafael See Their R&D Share Shrink
The push has a policy behind it, not just a market. Globes reported in December that a senior Ministry of Defense research official identified as Dr. Gold ordered at least 10% of the ministry’s 2026 R&D budget to go to startups instead of the sector’s three largest companies, an unmistakable reference to Elbit Systems, Israel Aerospace Industries and Rafael Advanced Defense Systems.
Col. Kohn, quoted in the same report, said the calculation was deliberate. “This will be a different year than the previous one,” Kohn said. “The startups are not expected to achieve the same backlog of orders.” With the large companies already posting record exports, Kohn added, boosting the startup ecosystem was the right call.
Rafael’s own research leadership framed the shift as addition, not subtraction.
The synergy between agile startups and established defense organizations significantly shortens the path from initial concept to battlefield deployment.
Dr. Moshe Shuker, vice president of research and development at Rafael, made that case at the Haifa forum. It is the same approach Israel took when it committed a $33 million national quantum computing fund, backing an early-stage frontier technology directly instead of waiting on private capital alone.
Kela’s Climb From Seed Money to a Billion-Dollar Tag
No company in the Emerging Leaders class illustrates the speed better than Kela. It went from a founding round to a nine-figure valuation inside two years.
- 2024: Hamutal Meridor, who previously ran Palantir’s Israel operations, co-founds Kela with Alon Dror, Jason Manne and Omer Bar-Ilan in the wake of the October 7 attacks.
- Seed round: Sequoia leads an $11 million investment, joined by In-Q-Tel, the CIA’s venture arm.
- Series A: Lux Capital leads a $28 million round, pushing Kela’s total past $39 million within months of its public unveiling.
- May 2025: A further $60 million round brings the company’s first-year total to roughly $100 million.
- May 2026: Stripes and D1 Capital Partners lead a $200 million round at a $1.2 billion valuation, with Bill Ackman and former Google chairman Eric Schmidt among the participants.
The May 2026 round lifted Kela’s lifetime total to $300 million raised across four rounds, according to Startup Nation Central’s database, a figure gathered from seven investors into a company that still runs on 11 to 50 employees. Globes reported a wide gap between that valuation and Kela’s revenue, described as a few tens of millions of dollars, a gap the outlet attributed mainly to investor confidence in future military contracts, not current sales.
Exports Keep Climbing Even as the Backlash Grows Louder
The industry these startups are muscling into is not shrinking. Israel’s defense exports hit an all-time record of $19.2 billion in 2025, the fifth straight annual record, the Ministry of Defense said in a statement announcing the country had crossed the $19 billion export threshold, a nearly 30% jump from $14.8 billion in 2024.
Government-to-government deals, which let firms act as subcontractors on faster, less bureaucratic timelines, accounted for roughly $10 billion, more than half the total. Just over half of all deals, 53%, were worth $100 million or more. Europe took the largest share at 36%, driven by rearmament since Russia’s invasion of Ukraine, followed by Asia-Pacific at 32% and the Middle East and North Africa, including Abraham Accords partners, at 15%.
Calcalist’s CTech reported that the record came even as boycotts, protests and attempts to exclude Israeli firms from international arms exhibitions spread through the year. Israeli defense firms still brought full product lines to Farnborough’s air show floor without scaling back their exhibits this month, a sign the friction has not slowed the sales.
A Northern Push for a Bigger Share
The boom clusters hard around the center of the country. About 80% of Israel’s defense-tech companies sit in central Israel, according to data presented at the Haifa forum.
Hanan Markovitz, chief executive of the Haifa Economic Corporation, said Israel cannot keep concentrating its security establishment’s best talent and technology in one region. “Investment in Beersheba is welcome, but national resilience also requires a strong hub in Haifa and the North,” he said, calling for a national initiative to pull development centers north.
HiCenter Ventures, the group behind the forum, was itself built to answer that gap. Established by the Haifa Economic Corporation and the city, it has backed 104 startups since 2021 that have raised more than $300 million combined, a fraction of what Kela alone raised in its May round.
Betting on a War That May Not Continue
The ministry built a hedge into its own wager. Alongside the startup-focused R&D share, it joined the Ministry of Finance to set up state-guaranteed investment funds worth NIS 200 million, roughly $54 million, meant to keep capital flowing into defense-tech startups if the war-driven order rush cools.
That caution is not incidental. Kohn’s own warning, that 2026 will not match the operational tempo of the previous two years, is the assumption baked into every figure in this ranking. The startups Duns 100 just crowned were funded for a war that may not last as long as the money betting on them.
