Around the world, defense tech has moved from the sidelines to center stage. Geopolitical shocks, cyber warfare, and the demand for rapid innovation have turned dual‑use technology into one of the most aggressively expanding sectors in modern industry.
Venture capital, once wary of defense, is now chasing breakthroughs in AI, autonomy, and space‑based systems.
Aurelius Capital is one of the new players rising in this transformed landscape. The fund was co-founded by Alon Lifshitz and Tomer Jacob, alongside former NSA director Michael Rogers and former IAF commander Maj.-Gen. (res.) Amir Eshel, and former Mossad deputy director Udi Lavi.
It was against this backdrop of geopolitical instability and a booming defense ecosystem that Lifshitz found himself drawn into the sector. But for him, the pivot into defense was not driven by market trends alone but by a moment of national trauma.
“It started on October 7,” he told The Jerusalem Report. “From day one, my wife and I started thinking about how to give back. Initially, it was about donations like everyone else, but throughout 2024 we kept meeting tech guys who came from the battlefield, still in uniform.”
What began as a personal response soon evolved into a professional mission. Lifshitz, a veteran investor with a global network, was repeatedly encountering reservists who were also engineers, founders, and innovators.
“Initially, it was an anecdote,” he recalled. “But the more I met them, the more I realized it was more. And I said to my wife, ‘Let’s do a small fund. It’s a mission, it’s for Israel, but it’s more. There’s merit here.’”
The fund came out of stealth in October. The combined expertise of the team spans decades of strategic leadership in intelligence, cyber operations, and defense planning.
“We put together a team that came from specific backgrounds, and they can very quickly assess the tech and its relevance for the defense sector,” Lifshitz said.
The fund, headquartered in Tel Aviv, New York, and London, is positioning itself as a global force in defense innovation, blending venture capital agility with private equity depth. Its strategy is built on speed and flexibility, and targeting companies with clear dual-use applications.
A market shift
For Lifshitz, who has been active in the Israeli tech market for two decades, Aurelius marks a turning point in how defense innovation is funded and scaled. For most of his career, Lifshitz avoided defense investments.
“In the past, as an investor, I couldn’t invest in defense. Limited Partners [LPs; passive investors] didn’t want me to touch that. But almost overnight, the defense sector opened for innovators,” he said. “There were active wars with superpowers struggling. It was clear that the superpower would win in terms of firepower. But you need tech. And so I decided to do something about it.”
Investing forward
Aurelius plans to invest roughly 70% of its capital in Israeli companies and 30% in American firms. It has already completed three investments. The first is Outpost, a Los Angeles-based space‑tech company co‑founded by an Israeli entrepreneur.
“They have understood that the next logistics frontier is space,” Lifshitz explained. With launch costs falling and global shipping strained, he believes orbital logistics will become a strategic asset. Outpost, he noted, can “manufacture in orbit and ship anywhere in the world with accuracy of 20 meters within 60 minutes.”
Space, he contended, serves commercial and defense needs.
For Lifshitz, the motivation is both strategic and deeply personal. He believes that the world is entering a period of heightened uncertainty.
“Tech has always been central to securing Israel, and tech is at the core of the Israel‑US relationship,” he told the Report. “At the end of the day, tech helps save lives and helps create industry, and that combination is very important.”
The United States and Israel are the main target markets for Aurelius, Lifshitz said, adding that Europe “has always been a challenge, and the war made it even harder because many are anti‑Israel. Yet, even the most anti‑Israeli countries buy our products. I know firsthand. I’ve seen it.”
AI as foundation
Lifshitz believes that the explosion of defense‑tech in Israel is inseparable from the rise of artificial intelligence. But, he stressed that the most important innovations are the foundational systems. “It’s not AI on the edge, but AI as infrastructure that you build the entire solution around,” he explained. “AI is the very base, and you build on top of that.”
This shift, he argued, has made it easier for start-ups to sell into the defense market.
For Lifshitz, the rise of defense tech is not just a market cycle but something that will define national security and economic strength for decades. He sees Israel at the center of that shift, not only because of its battlefield experience but because of its culture of innovation.
As Aurelius Capital accelerates its investments and builds its binational team, Lifshitz is clear about the long game. He wants to shape a sector that is still being born, one where dual‑use technologies can move quickly from concept to deployment, and where small companies can meaningfully influence global security.
However, he insists that the mission is bigger than any single company or fund. It is about ensuring that Israel and its allies remain technologically resilient in a world where threats evolve faster than governments can adapt. ■