ISRAEL AT WAR - DAY 141

search
Interview

In wartime, a US investor scouts for more battle-tested Israeli tech

US venture capitalist Aaron Kaplowitz launches 1948 Ventures to invest in technology for military and civilian applications, as Israel wages war on Hamas terror group

Sharon Wrobel

Sharon Wrobel is a tech reporter for The Times of Israel.

Aaron Kaplowitz (right), founder of 1948 Ventures, meets with Israeli startups at Start-Up Nation Central in Tel Aviv. (Courtesy)
Aaron Kaplowitz (right), founder of 1948 Ventures, meets with Israeli startups at Start-Up Nation Central in Tel Aviv. (Courtesy)

Aaron Kaplowitz had been planning to set up his new investment firm in January, but the war with the Hamas terror group prompted the venture capitalist to bring the launch forward so he can double down on battle-tested Israeli tech.

Based in Miami, Kaplowitz created 1948 Ventures within days after the October 7 murderous onslaught by the Iran-backed Hamas, in which thousands of terrorists crossed the Gaza border and massacred some 1,200 people, most of them civilians, and took over 240 hostage.

“It was very clear to me early on that the startup community would take a big hit and that there’s going to be a lot of pain, so there was going to be a lot of need to get capital,” Kaplowitz told The Times of Israel during his second trip to Israel since the war broke out. “When capital is needed, there are good opportunities for investments.”

“Those two things drove the urgency of the venture: both the need and the opportunity,” he explained.

Shortly after the launch of the investment firm, Kaplowitz, who is also president of the United States-Israel Business Alliance — an organization that helps connect and strengthen business ties — made his first trip to Israel since the war erupted.

“When I came to Israel less than 10 days after the attack, people thought I was crazy,” said Kaplowitz. “I didn’t think twice, I got on the first plane I could.”

Aaron Kaplowitz, founder of Miami-based 1948 Ventures, visits a rampaged home in Kibbutz Nir Oz in southern Israel, Nov. 28, 2023. (Courtesy)

“Today I still have people who think I’m crazy but a little bit less so,” he added.

Named after the year Israel was founded, 1948 Ventures looks to invest $100,000 to $1 million in early-stage Israeli startups developing dual-use technology, for military and civilian applications. The goal is to make between three to five investments before the end of the year in startups developing disruptive technology related, for example, to drones or cybersecurity, according to Kaplowitz.

“We have written our first check and have already decided to do a follow-on investment in a seed-stage company developing technology for the protection of critical infrastructure that I have been looking at for some time, and October 7 brought their solution into a more urgent light,” said Kaplowitz.

When Kaplowitz came to Israel in his first wartime trip five weeks ago, he said, it felt like the country was going through a “national PTSD.”

“I met with a number of companies who had commitments or offers — mostly from international investors — that once October 7th happened, those commitments were delayed, put on hold, or just canceled,” he recounted. “Those are the most painful ones to hear about, because those companies were on the cusp of getting much-needed capital injections.”

In the aftermath of the October 7 atrocities, the Israeli army called up around 350,000 reservists – including many tech employees – which has been disrupting the operation of thousands of businesses across the country.

Israeli reserve soldiers seen during military training in the Golan Heights, northern Israel, October 30, 2023. (David Cohen/Flash90)

Returning to Israel last week, Kaplowitz said he found Israelis still in pain but now trying to find solutions in navigating their lives and businesses during an ongoing war.

“Technology that people are working on here is incredible, which obviously doesn’t necessarily translate into a good investment,” Kaplowitz remarked. “But what’s inspiring and encouraging to me is the resilience that everyone is trying to snap back to work even though a lot of the companies we are meeting with have large percentages of their workforce on reserve duty or helping out in other areas.”

“The Israeli tech community is really amazing at figuring out how to patch up those holes for those absences,” he said.

During his current trip to Israel, Kaplowitz has already met with more than 25 startups, with some based in the south of the country, including in Sderot and Beersheba.

A car is seen damaged after a rocket fired from Lebanon hit the northern town of Kiryat Shmona, November 5, 2023. (Erez Ben Simon/Flash90)

“I met with a company where their CTO is in an army tank unit in Gaza and he happens to be working on a technology that could be really helpful to protecting his unit and other soldiers,” said Kaplowitz. “So you can imagine that when he comes out of the military, he has seen exactly what the application can be and he is motivated to get that technology back into the battlefield.”

“A lot of what we are looking at now is literally lifesaving technology and we are focused on the companies that have the most urgent application to save lives,” he said.

Kaplowitz noted that the war situation and logistical challenges, including the availability of flights, is slowing down investment cycles for Israeli startups.

“Part of the reason I’m here is also to signal to the venture community in the US that if they’re thinking of giving up on Israel right now – they are missing out on opportunities,” Kaplowitz said.

Going back to the US, Kaplowitz said he will be trying to organize an investors’ mission to Israel in the coming months.

“I don’t want to push anyone to come here who is not prepared to be in a more dangerous situation,” Kaplowitz said. “Nevertheless, I feel it’s more dangerous if I didn’t come to Israel now and find ways to support technology that can protect communities and save lives.”

read more:
Never miss breaking news on Israel
Get notifications to stay updated
You're subscribed
image
Register for free
and continue reading
Registering also lets you comment on articles and helps us improve your experience. It takes just a few seconds.
Already registered? Enter your email to sign in.
Please use the following structure: example@domain.com
Or Continue with
By registering you agree to the terms and conditions. Once registered, you’ll receive our Daily Edition email for free.
Register to continue
Or Continue with
Log in to continue
Sign in or Register
Or Continue with
check your email
Check your email
We sent an email to you at .
It has a link that will sign you in.