Israeli defense-tech co Kela raising $200m at $1.2b valuation

Exclusive: Israeli defense-tech startup Kela Technologies, which has become one of the most talked about companies in Israel’s defense industry, is currently completing a $200 million financing round at a company valuation of $1.2 billion, a source close to the deal has told “Globes.” The financing round is led by Stripes and D1 with the participation of existing investors Sequoia and Lux Capital. Also investing in this round are US hedge fund manager and billionaire Bill Ackman, a shareholder in the Tel Aviv Stock Exchange (TASE) and former Google chairman Eric Schmidt. Prior to this financing round, Kela had raised $100 million since its founding two years ago.

This financing round follows major growth in the company’s business activity. Only recently, Alon Dror, the company’s CEO, revealed in a podcast he hosted that Kela recorded revenue of about $20 million in 2025. According to sources, the company signed contracts worth over $50 million last year. This is a relatively rapid penetration rate into the defense market, where sales cycles often last years and require complex trials, regulatory and approval processes. The combination of revenue growth, orders backlog and significant capital from the private market allows Kela to act aggressively, both in organizational expansion and in field operations.

A senior founding team for rapid expansion

Behind Kela stands a high-profile team of founders. The company was founded in July 2024 by Alon Dror, a former senior official at the Ministry of Defense Directorate of Defense R&D (DDR&D) (MAFAT).and winner of the Israel Defense Prize, who was recently selected for Globes’ 40 Under 40 list, along with Hamutal Meridor, former Palantir Israel president and Vintage Fund partner. They were joined by VP R&D Omer Bar-Ilan and VP product Jason Manne.

Kela was founded as a company that develops command and control systems for border areas, inspired by the successful US startup Anduril, which was founded in the same way. According to Anduril’s philosophy, command and control systems can be added and removed as needed, including sensors, radar systems, drones and various weapons, and combined according to the customer’s requirements.

“Globes” has learned that within a brief period, Kela has grown from dozens of employees to about 150 employees. The bulk of the activity is with Israel’s Ministry of Defense, and the workforce includes veterans of IDF tech units, graduates of international tech giants and field personnel. The large sum Kel has raised in a short time, about $300 million, allows it to offer excellent salaries, attracting even those who worked at the most prestigious companies, while Kela has an aim that few tech giants have in developing products for homeland defense. Kela works only with the Israeli security establishment but is set to expand to the US.

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One of the major developments in Kela’s activities has been the relatively rapid transition from the development phase to deployment in the field. The company has opened a factory in the south that specializes, among other things, in the production of ammunition. According to sources, Kela has also expanded within a year from deployment on the border in one military outpost to a high double-digit number.

After bidding on the eastern border tenders and managing to secure several outposts on the Jordanian border, Kela is currently significantly expanding its activities on the northern border, with dozens of additional outposts. This deployment not only rivals the likes of Elbit Systems – the dominant player in the Israeli military equipment market – but also allows Kela to work with as many units as possible, get to know their field needs, and adapt products to their requirements.

An open model in a conservative industry

At the heart of Kela’s activities is a command and control system based on a relatively open architecture, which Dror describes as similar to the Android system – a platform on which different suppliers can develop different systems and easily connect. The system is designed to enable the connection between different components on the battlefield: sensors, drones, and other UAVs, and to create a unified picture of the situation in real time. In contrast to the closed systems that characterize some of the solutions of veteran defense companies, such as Elbit, Kela’s platform allows the integration of systems from different sources, including civilian technologies, within a single envelope. Recently, the company has been working to integrate armed drones and mini-UAVs manufactured by it and those manufactured by foreign companies into its system.

The open model allows it to assemble systems more quickly on demand, even without the customer – in this case the IDF or the Ministry of Defense – paying in advance. Since Kela, like other defense companies, pre-produces products that can fit multiple frameworks, customization for a specific customer is performed at a lower cost than a system pre-ordered from one of the defense equipment giants.

However, market sources point out that the integration of open architecture in defense systems also raises questions regarding cybersecurity aspects and the company is trying to resolve this by hiring experts in the field from the military and industry.

In parallel with the technological approach, Kela also operates using a relatively competitive pricing strategy, which allows it to compete for projects against veteran players. According to sources, Kela sometimes offers solutions at very competitive prices compared with its rivals, among other things to penetrate initial projects and expand the scope of its activities, funded by the current large financing round. Industry sources note that such a model requires further adjustment to a long-term cost structure, especially when it comes to security projects that include maintenance, upgrades, and ongoing support over many years.

Despite the progress in its activities, Kela is still at a relatively early stage in terms of its market positioning, and this is at the same time that security procurement processes often include lengthy trials, testing, and approval procedures, which can slow the rate of penetration of new players.

The gap between the extremely high valuation achieved by Kela – $1.2 billion – and the company’s revenue, a few tens of millions of dollars – reflects a very high valuation by US investors for a company that has so far operated only in Israel but is growing at a fast pace. Part of this valuation is derived from estimates of the potential for future contracts and possible volumes of activity with existing customers, and not just from the current scope of activity. However, the current funding indicates a high level of confidence on the part of investors in Kela’s ability to expand its operations and become a significant player in the US defense market, even though it is saturated with local players.

No response to this report has been forthcoming from Kela.

Published by Globes, Israel business news – en.globes.co.il – on May 5, 2026.

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