Israel: An In-Depth Look at Its Thriving Space Tech Ecosystem
Discover Israel's space innovation, including experimental programs for kindergarden kids, understand its allure for founders & investors, and explore the key ecosystem players.
Issue No 38. Subscribers 6193.
After providing an in-depth review of the Singapore Space and Deep Space ecosystem, we've been met with a wave of reader interest, eager for a closer look at other international ecosystems. Start-ups frequently ask for assistance with their geolocation strategies, and investors are curious about where to place their bets. This week, we're turning our spotlight on Israel. Famously dubbed the 'Startup Nation', Israel has made remarkable progress in space technology. So, could it be time to consider calling it the 'Space Startup Nation'? Let's delve in and find out.
A Start-up Nation
The renowned book, 'Start-Up Nation: The Story of Israel's Economic Miracle' by Dan Senor and Saul Singer, poses an intriguing question: How does Israel, a country of 9.7 million, 75 years old, persistently in conflict since its inception, and devoid of natural resources, outperform larger, peaceful, and resource-rich nations in terms of producing start-up companies?
To gain a deeper understanding of the ecosystem, we engaged in a conversation with Doron Zauer, a General Partner at Earth and Beyond VC. This venture has started deploying capital in early stage Israeli new-space and deep-tech start-ups. When asked to offer some insights into the Israeli ecosystem, Zauer provided some initial figures:
Israel is home to over 6,000+ active start-ups, the highest per capita in the world, and hosts 68 unicorns, again leading the world on a per capita basis. It also has the third-highest number of NASDAQ-listed companies globally, trailing only behind the US and China. Lastly, Israel stands as the highest percentage of engineers and scientists per capita and second globally in terms of investment and research as a proportion of its GDP.
Israel's Space Heritage
The following chronicle of significant milestones marks Israel's 35-year journey in the realm of space exploration.
1988: Israel officially entered the space age with the launch of its first satellite, Ofek-1 (“horizon” in Hebrew), from the locally built Shavit launch vehicle. With that launch, Israel became the eighth country in the world to have developed, produced, and launched its own satellites.
2003: Ilan Ramon, the first Israeli astronaut, was selected by NASA for the Columbia mission.
Israel's first astronaut, Ilan Ramon. (NASA) 2011: SpaceIL was founded as a nonprofit organization aiming to land the first Israeli spacecraft on the Moon as part of the Google Lunar X Prize competition.
2019: SpaceIL launched Beresheet, the first Israeli lunar lander and the first privately funded mission to the Moon. Beresheet reached the lunar orbit but crashed during landing due to a technical failure.
2021: Israel signed the Artemis Accords, a set of principles for peaceful exploration and cooperation in lunar activities led by NASA.
"Israel's vibrant startup industry owes much to the nation's unique circumstances, borne out of a necessity to thrive amidst larger military forces in the region," asserts Assaf Wise, CTO and Co-founder of Earth and Beyond Ventures. "Given our relatively smaller defense capacity, Israel had to innovate and leverage technology to bridge this gap. This emphasis on innovation was not confined to defense. For instance, after ceding the Sinai Desert to Egypt in 1982, Israel lost a strategic safeguard. In response, we launched the Ofek imagery satellite in 1988, underscoring our resolve to advance in space intelligence. This backdrop of constant challenges and the consequent need for self-reliance has nurtured an ethos of innovation and entrepreneurship. It is this ethos that has catapulted Israel's startup landscape and space technology onto the global stage of cutting-edge innovation."
Public and Non-profit Pillars of Israel's Thriving Space Community
Israel has a vibrant and diverse space community that involves government agencies, academic institutions, non-profit organizations, and private companies. Some of the main public and non-profit players in the Israeli space ecosystem are:
Israel Space Agency (ISA): The main governmental body that oversees and supports the Israeli space sector, provides funding for research and development projects, participates in international cooperation frameworks, and promotes public awareness and education on space issues. The ISA’s annual budget for 2021 was about $45 million. In 2022, the ISA devoted an estimated $6,000,000 to aid 11 companies in advancing innovative space technologies. The ISA also participates in several international frameworks for cooperation in space activities, such as the European Space Agency (ESA), the United Nations Committee on the Peaceful Uses of Outer Space (COPUOS), the International Astronautical Federation (IAF), and the Artemis Accords. Israel also has bilateral agreements with several countries for cooperation in space matters, such as the United States, France, Italy, Germany, India, Japan, Brazil, Canada, Ukraine, Kazakhstan, and others.
Israel Ministry of Defense (IMOD) and Israeli Air Force (IAF): The governmental bodies that operate the Palmachim, the main spaceport in Israel, and launch satellites using the Shavit launch vehicle. This places Israel amongst the fewer than 20 countries worldwide with active spaceports capable of successful orbital launches. The IMOD and IAF also guide the development and production of missile systems, propulsion systems, satellite communication systems, and space protection systems through Israeli defense companies such as Rafael Advanced Defense Systems, Israel Aerospace Industries (IAI), and Elbit systems.
Israel Innovation Authority (IIA): The governmental body that fosters innovation and entrepreneurship in Israel, provides funding and support for start-ups and companies in various sectors, including space. Find more about the program which supports R&D for finding technological solutions in the different fields of space.
SpaceIL: A non-profit organization that aims to land the first Israeli spacecraft on the Moon and inspire the next generation of scientists and engineers. SpaceIL launched Beresheet, the first Israeli lunar lander and the first privately funded mission to the Moon, in 2019. You can order a lecture about the Moon here or kindergarden teachers can find some content for their class here.
An artist's depiction of the Beresheet lander on the moon's surface. (Image credit: SpaceIL) Ramon Foundation: A non-profit organization that promotes excellence in education, science, technology, and aviation in memory of Ilan Ramon, the first Israeli astronaut. The Ramon Foundation organizes various programs and events, such as Space Kids, an experimental kindergarden program, or Ramon Space Lab, a unique program to allow students to submit their experiments to ISS.
Asher Space Research Institute (ASRI): A research institute at the Technion – Israel Institute of Technology that conducts multidisciplinary research in space sciences and engineering. ASRI also offers a competitive space research grant program, conferences, and workshops as part of the Small Satellite Knowledge Centre.
We had a conversation with Prof. Dan Blumberg, the Chairman of the Israel Space Agency, about the secret behind Israel’s flourishing space ecosystem and the interconnection between academia and industry. He shared his insight, saying, “In Israel, academia spearheads most of the long-term, high-risk research, while the bulk of development is handled by the industry. In the ‘Valley of Death,’ the critical gap between academic research and industrial application, additional governmental funding is made accessible through the Israel Innovation Authority, a part of the Ministry of Innovation, Science, and Technology.
Major Corporations Pioneering Israel's Space Sector: Collaborations and Contributions
Israel has a number of large and successful companies that develop and manufacture satellites, launchers, payloads, ground segments, and space technology services. Here are some of the top five big corporations in Israel and how they work with international companies and start-ups:
Israel Aerospace Industries (IAI): founded in 1953, is a government-owned corporation and the largest aerospace and defense company in Israel, which develops and manufactures satellites and launchers. The IAI's revenues in 2021 amounted to approx. USD 4,477 million.
Elbit Systems: founded in 1966, a defense electronics company that provides electro-optical systems, communications systems, electronic warfare systems, and cyber solutions for space applications. In 2021, Elbit Systems reported revenues of approximately USD 5.28 billion, with a current market capitalization close to USD 8.8 billion.
Rafael Advanced Defense Systems: founded in 1948, a government-owned defense company that develops and produces missile systems, propulsion systems, satellite communication systems, and space protection systems. The company’s sales in 2022 totaled approximately $3.45 billion.
Spacecom: founded in 1992, first satellite launched in 1996. A satellite communications company that operates the Amos series of geostationary satellites. Spacecom provides communications services to Africa, Europe, the Middle East, Asia, and North America. Spacecom offers broadband internet access, cellular backhaul, television broadcasting, maritime communications, and government services. The current company turnover is USD $100M.
Gilat Satellite Networks: founded in 1987, a satellite networking company that provides broadband satellite communication products and services. Gilat Satellite Networks develops and produces satellite modems. The current market capitalization is close to USD 311 million.
ImageSat International (ISI): founded in 1997, is a leading provider of geospatial and geo-intelligence solutions with over 20 years of experience in space imagery production and analytics. The current market capitalization is close to USD 204 million.
We had a chat with Peri Muttath, Director of Disruptive Ventures at the Israel Innovation Authority. We discussed the critical role of innovation in Israel and how the IIA fits into this dynamic ecosystem. Here's what he shared with us:
The Israel Innovation Authority is responsible for the country’s innovation policy. It operates for the benefit of the Israeli innovation ecosystem and Israeli economy as a whole and its role is to nurture and develop Israeli innovation resources, while creating and strengthening the infrastructure and framework needed to support the entire knowledge industry.
Innovation is by far the most valuable resource for the State of Israel, serving as a national asset crucial to economic prosperity. Israel Innovation Authority seeks to further develop and support technological innovation in Israel through various support tools. Its mission is to strengthen the innovation ecosystem and promote innovation, entrepreneurship, and disruptive technologies.
The development of the space industry in Israel is a stimulus for social and economic growth. Therefore, the goal of the Israel Innovation Authority is to strengthen the knowledge and the technological development capabilities of the space industry in Israel, by offering support in this sector and encouraging research and development for finding new, innovative, and advanced technological solutions and products that will benefit the entire humankind and help with the protection of Life on Earth. To this end, we are constantly striving to expand the scope of our cooperation with countries and institutions that engage in space.
Israel's Rising Stars: Trailblazing Space Start-ups
Israel has a number of innovative and successful start-ups that develop and provide various products and services for the space sector. Here are some of the Israeli promising space start-ups:
Helios: A company that develops technology to produce oxygen for fuel and breathing from lunar soil and green steel. Total funding to date is USD 6M.
Ramon.Space: A company that engineers hardware and software for new space. The most recent funding was a Series A round, led by StageOne Ventures, amounting to USD 17.5 million.
SpacePharma: A company that provides microgravity research services using autonomous and miniaturized labs on nanosatellites. SpacePharma has secured USD 6 million from grants.
Stemrad: A company that develops personal protective equipment for protection against the effects of acute radiation syndrome and sickness. The most recent funding was a Series C round, amounting to USD 6 million.
Noohra: A company that develops a patented Short Wave Infrared (SWIR) Hyperspectral Imaging system, which will usher in a new era of Greenhouse Gas (GHG) emissions monitoring from satellite, drone, and ground platforms.
Gorilla Link: A company that offers an innovative new way for IoT devices to communicate via satellite technology. Total funding to date USD 2M.
We reached out to Dr. Igal Kronhaus, former professor at Technion (Israel’s premier tech university) and the inventor of patented Hall-2.0 technology. As a founder and CEO of Space Plasmatics, he shares his experience of transitioning from academia to the entrepreneurial world in Israel:
"Knowing key players in the Israeli space tech ecosystem, mentioned in this article, I pitched my breakthrough innovation, earning their encouragement to commercialize it. This prompted me to leave academia and embark on an entrepreneurial journey with Space Plasmatics. We secured an exclusive license for my patents with Technion and the Israeli Ministry of Defense (IMOD), which has shown great support, introducing us to potential customers and funding groups.
We successfully pitched our proposal to develop a commercial prototype to the Israel Innovation Authority, securing their matching funding. Our venture was also selected for the prestigious Starburst/Astra space tech accelerator. During the three-month program, we caught the attention of Israel Aerospace Industries (IAI). We were invited to participate in their Pilot/Accelerator competition, eventually becoming one of the rare projects from outside IAI to win their grant."
Fueling Innovation: Israel Space VC ecosystem
Spacetech startups in Israel can apply to various VCs and accelerators and incubators that offer funding and support for their growth. Some of the options are:
TYPE5 is a venture-building firm dedicated to nurturing growth and innovation, offering access to capital, direct M&A, and strategic project opportunities. Through initiatives such as the Space Tech Summit and an online community, they are cultivating an ecosystem that encourages the rise of new leaders in the space technology sector.
Earth and Beyond Ventures is a pre-seed Israeli VC fund which invests in cutting edge deep technologies with potential application on earth and in space. EBV’s investors include leading global deep tech companies such as Corning and Kyocera, and is supported by the Israel Innovation Authority under its flagship Incubator program. Earth & Beyond is also a key player in developing Israel’s burgeoning space tech industry, working closely with the Israel Space Agency and other leading private industry partners. To submit your investment application, please use this form.
Starburst is a global early-stage accelerator & VC that connects space tech startups with corporates, investors, and government agencies. Starburst has invested to date in 140+ startups and is backed by 2 active venture funds. To apply, submit your application through their website.
State of Mind Ventures is a VC firm that invests in early-stage startups that are developing breakthrough technologies in various domains, including space tech.
IAI Accelerator. IAI Innovation Center, in collaboration with Starburst Accelerator, runs an accelerator program, speeding up the development of advanced technologies-based ventures.
When speaking about the space startup market in Israel, Noemie Alliel, who is the Managing Director of Israel at Starburst Aerospace, shared some insightful points. She highlighted the successful IPO of ISI ImageSatIntl, a company now generating revenue worldwide. She also noted the acquisition of Effective Space by Astroscale as a successful exit. Beyond these two noteworthy achievements, Noemie recognizes that many ventures are vibrant startups or burgeoning enterprises, which she playfully characterizes as 'charging ponies'. Noemie underlined Starburst Aerospace's mission in this context: to transform Israel into a leading space tech nation. They are dedicated to investing in determined leaders in deep tech who are tirelessly working towards a safer, greener, and more connected world.
It is commonly believed that space exploration is a privilege only accessible to major powers such as the USA, China, and the EU. However, Israel stands as a compelling example that refutes this assumption. If a country with a population of 9.7 million can accomplish such incredible feats, it suggests that others can do the same. Only our imagination and ambition limit us. We hope this article inspires you to take action, regardless of the country you live in. If you are interested in contributing to the development of space exploration in your homeland, please reach out to us at hello@spaceambition.org. We would be glad to brainstorm ways in which we could assist you.
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Being in Israel I can only say that - yes - its a great place to build a spacetech startup!