Israeli venture capital fund Kinetica is raising US$150 million to invest in defense technology startups.

Founded by former Israeli intelligence and Air Force members, along with MizMaa Capital veterans, the fund targets early-stage investments from pre-seed to series A.

Kinetica has backed three startups so far, including Line 5, which raised US$20 million in a seed round. It’s reportedly the largest in the global defense sector this year. Other investments include Particle (electronic warfare and air defense) and Limitle CNC (precision manufacturing control systems).

The leadership team includes Yoav Knoll, Aaron Applbaum, and Frederic Landau, with Isaac Applbaum as chairman. High-profile advisors include former Navy Secretary Kenneth Braithwaite and former Senator Norm Coleman.

🔗 Source: Calcalist

🧠 Food for thought

1️⃣ Global defense tech investment reaches unprecedented heights amid geopolitical tensions

The surge in Israeli defense tech funds like Kinetica reflects a broader global trend, with defense technology investments reaching record levels.

Venture capital investments in defense technologies hit $1.77 billion in Q1 2025 alone, marking an 82% increase from the previous quarter with 24 venture deals—the highest quarterly amount ever recorded 1.

This investment boom is directly tied to escalating geopolitical tensions, with NATO’s recent decision to double member defense budgets and the US expanding its defense funding by 55% over the past five years 2.

The trend extends beyond traditional venture capital, with corporate venture capital playing a significant role, with $65.5 billion in CVC deals in the US contributing to global VC funding 1.

These figures demonstrate that defense tech has transformed from a niche investment category to a major focus for both specialized funds and mainstream investors seeking exposure to growing defense budgets worldwide.

2️⃣ Israel’s unique military-civilian innovation pipeline creates distinct competitive advantage

Kinetica’s founding team, comprised of former intelligence and military leaders, exemplifies Israel’s distinctive approach to defense technology development.

This model is rooted in Israel’s military units like Unit 8200, which has historically served as an incubator for tech talent and innovation that transitions into the civilian sector, particularly in cybersecurity and data analysis 3.

Despite its small size, Israel maintains one of the highest densities of startups globally, with venture capital investments per capita among the highest in the world 4.