"The next wave of global and Israeli tech is the deep tech wave – a wave that, for me, is really a make-or-break wave in terms of tech growth. Deep tech is not just software that needs to be written, as in 'traditional' high-tech, it also includes scientific and technological breakthroughs. For example, quantum computing, nuclear fusion, and more. Usually, this is a significant global challenge. 97% of these companies are trying to crack the SDGs (Sustainable Development Goals), which is defined as one of the most important efforts from the UN's perspective," Israel Innovation Authority CEO Dror Bin told the Globes' TECH IL conference today.
Bin further added that deep tech is not new to Israel. "Veteran companies like RAD and Indigo are deep tech companies, and even today this field is leading the way here, and Israel is at an excellent starting point. The number of unicorns in this field is increasing, while in most other high-tech fields it is decreasing."
High returns compared with other sectors
Bin also spoke about deep tech investments, which are considered higher risk. "It is known that startups, whatever they are, entail a high risk when they are founded, and in deep tech there is another major element of risk, which is realizing the technology, that is, whether the idea taking shape will succeed. This is no easy matter, and because there is such a technological risk, the time to reach revenue is usually longer, the regulation is heavier and the investment required from investors is greater. Also, there is a minority of investors who specialize in this field. And yet, those who do invest in deep tech see a higher return: the average return in the deep tech field is 26%, compared with 21% in 'traditional' high tech."
The Innovation Authority CEO spoke about Israel's good starting point in relation to deep tech, and backed this point up this with figures. "Israel is currently one of the leading countries in the world in the 'density' of deep tech companies," he says. "The rate of investment in deep tech in Israel, out of the gross domestic product, is 2.5% – first place in the world. Sweden is in second place and the US is third, although the absolute numbers there are of course much higher."
Bin noted that Israel already has world-class groundbreaking companies operating, and presented four of them, "all of which the Innovation Authority has invested in from the outset. We paved the way and looked for ways to ensure that Israel is on the wave of deep tech. We opened a startup fund for such companies in the early stages and in my opinion, this is the best government fund in the world today. We invest at various stages along the way, and from the early stages, we put up to 80% of the money in the idea stage, just to check that it can actually work. This way, at the end of the process, a selection of the best deep tech companies is created.
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"This year, we will invest about $200 million in early stage deep tech companies, so that Israel remains at the forefront. Everywhere in the world there are 'fathers' of innovation, and governments are pouring a lot of money into the field. Israel ranks in an excellent place, and our job is to ensure that it remains in that place, as a deep tech powerhouse."
Full disclosure: The Conference was held in collaboration with Starkware, Startup Nation Central, Microsoft Israel, Dream, FBC law firm, the Israel Innovation Authority, and Mekorot.
Published by Globes, Israel business news – en.globes.co.il – on April 23, 2025.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2025.
