Dror Bin, CEO of the Israel Innovation Authority, spoke at the Globes TECH IL conference, highlighting that deep tech is the next frontier for global innovation, with Israel leading the world in investment rates.
“The next wave of global and Israeli tech is deep tech—a pivotal wave for technological growth,” Bin said. “Unlike traditional high-tech, which focuses mainly on software, deep tech involves scientific and technological breakthroughs, such as quantum computing and nuclear fusion. These are global challenges, with 97% of these companies focused on addressing the UN’s Sustainable Development Goals, which are among the most critical global efforts,” he added.
Bin also emphasized that deep tech is not new to Israel. “Veteran companies like RAD and Indigo are prime examples of deep tech; even today, this sector continues to lead the way. Israel is in a strong position, with the number of unicorns in deep tech increasing, while in most other high-tech fields, that number is declining,” he said.
Higher Returns Compared to Other Sectors
Bin also addressed the higher risks associated with deep tech investments. “Startups, in general, carry high risk, and in deep tech, there’s an additional major risk—realizing the technology. The challenge lies in whether the emerging idea will succeed. This is not easy, and due to the technological risk, the time to revenue is usually longer, regulations are more stringent, and the investment required is greater. Moreover, fewer investors specialize in this field. However, those who invest in deep tech see higher returns: the average return in deep tech is 26%, compared to 21% in traditional high-tech,” he explained.
Bin discussed the higher risks of deep tech investments, noting that while all startups are risky, deep tech faces additional challenges in bringing the technology to life and determining whether an idea will succeed. These companies typically take longer to generate revenue, face heavier regulations, and require more investment. Only a few investors specialize in this area. However, those who invest in deep tech see higher returns, with an average of 26% compared to 21% in traditional high tech.
He also highlighted Israel’s strong position in deep tech, noting that the country leads the world in the density of deep tech companies. “Israel’s investment in deep tech, as a percentage of GDP, is 2.5%—the highest in the world,” he said, noting that Sweden and the US follow, though their absolute investment figures are much higher.
Bin shared that Israel already has several world-class deep tech companies, four of which the Innovation Authority has supported. “We’ve ensured Israel stays at the forefront of deep tech by opening a startup fund for early-stage companies. We invest up to 80% in the idea stage to ensure its potential. This approach helps us build a strong selection of top deep tech companies.”
“This year, we plan to invest around $200 million in early-stage deep tech companies to keep Israel at the forefront. Across the globe, there are ‘fathers’ of innovation, with governments investing heavily in the sector. Israel is in an excellent position, and our role is to ensure it stays there as a leading deep tech powerhouse.”
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