English Translation of an Article Published on Ynet

Elron Ventures has a long history on the Israeli stock exchange. Founded in 1961, the company co-founded Elbit Systems together with Israel’s Ministry of Defense. Elbit Systems later became one of Israel’s largest companies, with a market capitalization exceeding NIS 100 billion.

Over the years, Elron underwent several transformations. Approximately two years ago, it was acquired by Arieli Group, a leading global investment group that purchased a controlling stake in the company from Discount Investment Corporation.

Today, Elron holds a portfolio of more than ten companies operating in cybersecurity, deep tech, defense tech and artificial intelligence. The company is led by Chairwoman Lise Bachar Manoah and CEO Yaniv Schneider.

In recent years, defense tech has become one of the most prominent growth drivers in the technology market, fueled by rising defense budgets, geopolitical shifts and the entry of new investors into the sector.

“This is a long-term structural shift. Beyond rising defense budgets and geopolitical tensions, we are also seeing a wide range of investors entering the sector, demonstrating how much broader the recognition of defense tech’s potential has become in recent years.

Against this backdrop, our strategy rests on two main growth engines. The first is continued investment in growth-stage companies across cybersecurity, defense tech, deep tech and AI. The second is expansion into mergers and acquisitions by acquiring controlling stakes in early-stage defense tech companies, together with and/or through RDC, our longstanding partnership with Rafael Advanced Defense Systems Ltd.,” said Lise Bachar Manoah, Chairwoman of Elron Ventures.

“Our goal is to develop an additional growth engine alongside our investments in early-growth-stage technology companies, with the aim of building significant global defense companies through controlling acquisitions,” added Yaniv Schneider, CEO of Elron.

Several companies in Elron’s portfolio illustrate the key sectors underpinning its growth strategy.

Addionics

Addionics is a global company with research and development operations in Israel. The company is developing a technology platform based on smart metals, enabling significant improvements in battery performance, including energy density, stability and reliability.

What distinguishes its approach is that it is physics-based and chemistry-agnostic, meaning it is compatible with a broad range of battery chemistries.

Alongside the civilian market, Elron sees significant potential for the technology in defense and space applications, where advanced and reliable energy solutions are becoming increasingly critical.

“Our investment was made as part of the company’s next stage of development, ahead of its Series C funding round, alongside leading strategic investors. It reflects our focus on deep tech with dual-use potential and the ability to address large markets,” Bachar Manoah added.

Raven

For Elron, Raven represents the transformation currently taking place in cybersecurity.

In an era when AI enables vulnerabilities to be discovered and exploited at an industrial scale, traditional reliance on signatures or Common Vulnerabilities and Exposures (CVEs) is no longer sufficient.

Raven’s platform operates at runtime within the application itself, identifying behavioral anomalies and responding in real time, including to previously unknown attacks.

“We invested in Raven through all three of our investment vehicles: Elron’s Evergreen Fund, RDC in partnership with Rafael, and CyberFuture. This demonstrates our model as a publicly traded investment company operating through three complementary investment vehicles,” Schneider added.

Cyberidge

The world is moving toward a reality in which information collected today could be decrypted in the future—or potentially even today—using quantum computers or if an encryption key falls into an attacker’s hands.

This scenario, known as “harvest now, decrypt later,” creates a new need for protective technologies.

Cyberidge has developed technology that encrypts light transmitted through optical fibers, preventing the information from being recorded.

“This investment reflects our approach to identifying deep technologies that provide solutions not only to today’s threats but also to those of tomorrow. Here, too, the technology is suitable for both civilian and military applications,” Schneider added.

The company was founded by Professor Dan Sadot, a serial entrepreneur and professor at Ben-Gurion University. The technology was developed in the university’s research laboratories.

Creating Value for Shareholders

As a publicly traded company, Elron views maximizing shareholder value as a central part of its long-term strategy.

As part of this approach, the company has introduced a dividend distribution policy for the first time, reflecting its belief that the company’s success should also translate into tangible returns for shareholders.

“Over the past 18 months, we have distributed approximately $30 million to shareholders, alongside five exits, demonstrating our ability to create and realize value.

In addition, we implemented a share buyback program totaling approximately $1 million.

For us, share buybacks are one of the tools that enable active capital management when we identify suitable opportunities, while maintaining our focus on maximizing shareholder value,” Bachar Manoah added.

How AI Is Reshaping Cybersecurity

In cybersecurity, AI is lowering barriers to entry and enabling both more sophisticated attacks and defenses at greater scale.

The ability to identify system vulnerabilities, once a complex process, is becoming faster and less expensive and, in some respects, increasingly commoditized.

“What we are now seeing with models such as Anthropic’s Claude is not simply another technological improvement, but a fundamental shift in the cybersecurity industry.

Value is shifting from discovery toward the ability to manage, prioritize, remediate and protect within organizations.

That is why I believe the companies that succeed will be those capable of implementing real solutions within organizations and responding in real time, because threats are only intensifying and require immediate responses,” Schneider said.

This transformation is also reflected in Elron’s portfolio companies.

Raven, as noted, operates in Runtime Application Security, representing the shift toward real-time protection within the application itself, with the ability to identify and respond to behavioral anomalies during execution.

Breeze Security focuses on exposure management and cloud security, representing a proactive approach to understanding exposures and risks within complex environments.

Red Access focuses on securing the modern workplace, protecting browsers, applications and other enterprise assets while addressing risks arising from the use of generative AI and nontraditional workflows within organizations, without requiring the installation of agents.

AI as a Growth Engine in Deep Tech and Defense Tech

“When it comes to deep tech and defense tech, we view AI from a somewhat different perspective—not only as a disruptive force, but also as a significant driver of technological acceleration.

AI enables companies to optimize development and manufacturing processes, improve the performance of complex systems, and introduce new capabilities in areas such as energy, advanced materials and defense systems,” Bachar Manoah said.

In deep tech and technological infrastructure, AI is also beginning to transform how organizations build, manage and operate complex systems.

For example, OpenLegacy, which operates in core system modernization and integration, enables organizations to connect complex legacy systems to the digital world and make enterprise data accessible for organizational AI training processes.

Similarly, Addionics, operating in deep tech and energy, is developing a Smart Metals platform based on advanced metal architectures inside batteries.

Its goal is to improve performance characteristics such as energy density, stability and reliability.

The technology is also relevant to defense and space applications, where high-performance, reliable energy solutions are mission-critical.

“AI is indeed disrupting industries, but for us, it is also creating a new landscape of investment opportunities,” Schneider said.

Elron’s Growth Strategy

The company’s strategy currently focuses on two primary directions.

The first is continued investment in Elron’s core sectors: cybersecurity, defense tech, deep tech and AI.

The second is a focus on acquiring controlling stakes in early-stage defense tech companies, particularly those developing dual-use technologies, together with and/or through RDC.

“The goal is to build significant global defense companies while continuing our investment activities and returning value to investors through exits, secondary transactions and dividend distributions.

Elron aims to become a leading player in this hybrid model, with a substantial portfolio that generates both significant growth potential and cash flow,” Bachar Manoah said.