Kela: The Israeli startup rewriting how wars are fought

Anyone who thinks that high-tech is a glamorous profession is invited to talk to Hamutal Meridor. Several months ago, she found herself running through the center of Kyiv, heading toward a train station to seek shelter from the sounds of explosions in all directions, with no prior warning. What was she doing in Kyiv? As the founder of Kela, a startup emerging as one of the hottest players in the global defense tech sector (not just in Israel), she was on a business trip with Alon Dror, the company's co-founder and CEO. When you run a company that develops military systems, your beta site is often a battlefield.

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Hamutal Meridor.

"It was important for us to travel to Ukraine to understand what a battlefield outside Israel looks like, so that we wouldn’t build our systems solely for Israel," Meridor explains in a special interview with Calcalist. "It was a learning trip, and I was surprised by how many people we managed to meet there. In the end, they’re like us—living amidst war, and a culture of engineering and weapons development is emerging there as well. Quite a few malls that were once filled with brand-name stores have been converted into weapons factories. But unlike Israel, in Ukraine, you see the war everywhere. Even in the center of Kyiv, there are buildings with holes in them, something we aren’t used to seeing. There are no sirens either. Suddenly, we saw people running toward a train station, and we realized that Russian drones, made in Iran, were coming. By then, explosions were already happening all around us."

It sounds frightening from the outside, but it’s precisely this global instability that has fueled Meridor’s drive, giving her energy that she hasn’t felt in a long time. "Kela isn’t my first startup. I founded one in 2010 when everyone leaving 8200 felt the need to develop an app," Meridor says, referencing her first venture with self-humor. "But back then, it didn’t ignite my passion, and that’s why it closed down pretty quickly. We even returned the money to investors, which isn’t something many entrepreneurs do."

What’s different this time?

"There are people with different engines than mine, but I need to feel obsessed. My heart has to be fully in it, and that’s what’s happening with Kela. I stayed with the desire to start a new venture, but the world of defense tech is a combination of a startup with a mission. I know how that sounds, but it’s real. I think it’s something I grew up with. Both of my parents were always in service to the state, and the whole family, including my siblings and cousins, has always felt like partners in the Zionist project. I also particularly liked my role at Palantir because I felt it was an unconventional blend of business for the benefit of the state, especially when we worked with the Israeli defense system. At Kela, it’s even stronger because it's an Israeli company, and our vision is to make Israel a net exporter of military technologies. After all the advances in cyber, the next decade could very well be the decade of defense tech," Meridor declares.

Palantir is an American tech company that develops software for military use and has become one of the hottest stocks on Wall Street since its IPO, especially after it entered the S&P 500 index in late 2024. Meridor previously managed Palantir’s Israeli operations. The company, founded by Alex Karp and Peter Thiel, is currently valued at nearly $200 billion. Meridor’s experience at Palantir, a secretive and high-profile company, is one of the factors drawing investors to Kela, an equally secretive startup. Kela is reportedly developing solutions similar to Palantir’s. Meridor, who serves as president of Kela, founded it alongside Alon Dror (CEO), Jason Manne, and Omer Bar Ilan in the summer of 2024. Since its establishment, Kela has already completed two significant fundraising rounds: the first, $11 million from Sequoia Capital, one of the world’s most prominent venture capital firms, and the second, $28 million from Lux Capital, a U.S.-based VC firm that had not previously invested in Israeli companies. No Israeli funds participated in either round, as the massive American funds wanted the entire stake. As if that weren’t unusual enough, a CIA venture capital fund also participated in Kela’s investments, even before the team had presented a full product description.

The story of Kela is a perfect illustration of the defense tech boom that has captivated investors, including venture capitalists who once avoided anything resembling government contracts. Today, the landscape has shifted, and every investment body sees global instability shaking the world, even before the economic war sparked by President Trump's tariff announcement. Since the outbreak of the Russia-Ukraine war, instability has been on the rise, and concerns about potential conflicts with China and Taiwan have only intensified. This has prompted countries to reassess their weapons stockpiles. The findings were troubling—many militaries discovered that their equipment was outdated, leading to an urgent need to increase defense budgets. This is where Kela and its peers come into play. In 2024, global defense tech investments surged 33%, reaching $31 billion. One of the largest defense tech fundraisings in the U.S. was that of CHAOS Industries, affiliated with Palantir, which raised $145 million in Q4 2024.

Kela founders.

Global chaos has indeed benefited defense tech. When did you start considering the idea for Kela?

"Two years ago, after the Russia-Ukraine war broke out, I was at Vintage, a fund that invests in other venture capital funds. I saw that suddenly everyone was investing in defense. There’s been a strong wave in Silicon Valley since the disruption of the global order. Europe is already at war, and the U.S. is preparing for potential conflict with China by 2027. Every country is preparing for some kind of war, and defense budgets are increasing. Western nations are realizing they were caught off guard while their adversaries learned to use technology. This was a significant shift, and it became very clear. In the past, I had always been accustomed to people avoiding the defense industry, and there were often protests outside Palantir’s headquarters in California. But now, talent—the best employees in high-tech—wants to work in defense. We, as Israelis, unfortunately have an advantage, because while Americans go to Harvard or MIT after high school, Israelis go to elite IDF units like Sayeret Matkal, commando units, or tech units. At Palantir, in order to understand the needs on the ground, we had to send engineers to the frontlines in Afghanistan, and that was considered extreme. In Israel, there’s no need for that because everyone knows the users intimately. American investment funds have already coined a term for Israeli high-tech workers who understand the military world: ‘Techno Warriors.’"

And did October 7 give you the final push?

"Initially, after I got over the shock, I was involved in philanthropic work. I was approached by many people from the U.S. who knew me from different places, some wanting to donate money to Israel, others wanting to send equipment and technology. But after a few months, Israeli entrepreneurs started coming to me—those who had been released from the first round of reserves and had ideas on how to improve the IDF. They came to me in part because of my background at Palantir. I saw a real wave of entrepreneurs who started discussing how to establish startups after noticing ‘broken’ aspects of the military system during their reserve service. A friend introduced me to Alon Dror, saying, 'You two are talking about the same thing—building a new defense industry in Israel, and you need to meet.' We also happened to both be from Jerusalem originally and now live in Tel Aviv. Alon had just returned to Israel after a long stay in the U.S., where he studied at Stanford University. The timing was perfect—two weeks before the war broke out. He immediately enlisted in the reserves at the Ministry of Defense, and during his service, he met the third partner, Jason Manne, who was in reserves in Unit 81. Since then, I’ve woken up every morning with excitement."

There is indeed a lot of enthusiasm around the new industry designed to shake up outdated systems, but many are already talking about the hype and the excessive number of startups and capital invested in them. After all, this is an industry dominated by giant companies that sell to large, cumbersome entities, which operate in a completely different language from the small, agile startups. Are you sure all of them will be needed?

"I wish they wouldn't need what we do in life, but unfortunately, I do think we are heading toward a decade or more of war—at best, a cold war. But even in the reality of peace, we need to project strength and deterrence. That’s one of the lessons from October 7: deterrence doesn't come without working on it. Beyond that, wars accelerate military developments—it was true during the Cold War, and it started again in Ukraine. Now, too, a wave of military developments is beginning. Israel not only has the talent to leverage this but also the mindset—the sense of mission. You can see it in the people who are coming. In the past, it wasn’t cool to work in the defense field, and today, people who I never imagined would come to work for us are coming."

Kela was officially founded in July 2024 and currently employs 25 people, half of whom come from technology units such as Unit 81, and half from the field, patrol, and commando units. Dror, the company’s CEO, is a graduate of the Talpiot program and served for about a decade in the defense establishment—first as a tank department commander, and then in the IDF, where he won the Israel Defense Forces Award. Jason Manne, product manager at Kela, is an aeronautical engineer with 10 years of experience in developing anti-aircraft missiles in the Israeli Air Force and the technology unit of the Intelligence Corps (Unit 81). Omer Bar-Ilan, the company’s development manager, is an experienced engineer and serial entrepreneur, who previously served as head of the algorithms team at Rafael. Despite the short time since Kela’s founding, it already has a product, although Meridor is not allowed to disclose customer information. The official description provided by the company is very general: an open platform that allows Western militaries to quickly and safely integrate innovative commercial technologies into military systems.

"The product is centered around an operating system to which various components and hardware, such as sensors and radars, can be connected. Applications for command and control or decision-making can also be built. The system is intended for field fighters and also allows management and response from headquarters. Beyond the technology, which connects to all internal military developments, our advantage is rapid delivery. The first uses are more defensive, and it’s enough to look at Israel today to see that none of our borders are truly safe, and that there is a need for as many solutions that work as possible," Meridor emphasizes.

The information in the Kela system is collected from a variety of sources, processed in real-time, and presented in a unified command interface. This allows full control over all connected systems and resources. The integration of artificial intelligence and advanced algorithms helps analyze data, identify patterns, and produce relevant insights for commanders. This streamlines decision-making processes and enables rapid and accurate responses to threats. The system is based on an open and modular architecture, which allows armies to integrate new technologies in a flexible and secure manner, without needing substantial changes to existing systems. This capability allows security forces to quickly implement advanced solutions, expand their operational capabilities, and adapt to changing field conditions. By integrating advanced commercial technologies and increasing flexibility in implementing innovation, the Kela platform creates a smart and dynamic infrastructure for modern warfare. It allows armies to adapt quickly to changing threats, improve operational readiness, and optimize the use of resources, while maintaining an advantage on the battlefield.

Kela has become one of the most intriguing startups in Israel, but you don’t have a single Israeli venture capital fund on your list of investors. The situation is similar at Decart, the company that ranked first in this issue. As someone who also worked at a local venture capital fund, how do you see the future of the industry?

"I have a lot of questions about the VC model in general," Meridor says. "There are a lot of funds that are losing money, and I feel their model is expected to undergo a fundamental change. I saw it at Vintage, a fund that invests in other funds, and how everything collapsed in 2022. There were 14 years of zero interest rates, during which the stock market rose, and as a result, the high-tech industry and its valuation levels soared. Along the way, a lot of fat was created in venture capital, and I estimate that there will be a correction, because that’s how the economy works."

Meridor points out that many venture capital funds, with large numbers of partners, are failing to generate impressive returns for their investors. Specifically, she believes Israeli funds need to develop a strong thesis and focus on distinct areas of expertise, such as cybersecurity. Moreover, funds that can focus on early-stage investments can offer entrepreneurs the added value they need.

As a more experienced entrepreneur and someone who has worked for both a large American company and a venture capital fund, what advice would you give to entrepreneurs starting out in the defense field today?

"The defense industry in Israel is very closed and secretive, and it carries the mindset of October 6, not October 7. We at Kela are very open and believe in collaboration. We will be happy to help anyone who wants to. In the end, whoever develops the best solutions is the one who will succeed in sales, but it’s important to collaborate instead of competing head-to-head."

Some would say this is a feminine approach and that no man would suggest collaboration between startups that might be competitors. How do you deal with being a distinct minority, not only in high-tech entrepreneurship but even more so in the defense field, which is known for its misogyny?

"It’s true, I’m in a tough situation, both as an entrepreneur and in terms of confidence. On a trip to Ukraine, I suddenly realized that after we had been there for a week, I hadn't met a single woman. If I were 30 today, I’m not sure how I would handle the situations that arise. In my first startup, I had many experiences where people talked over my head to men, even though I was the founder and manager of the company. But today, I’m older, and it’s easier for me. I also have a lot of confidence in what I bring to the table and the sense of urgency that drives me. And in the end, my mother taught me to be this way—she raised me to believe I could do anything. That’s how I raise my daughters too."

If you mention your mother and we're talking about your family, you're part of a very political family—starting with your grandfather and your father, including your mother, a renowned economist who co-created the 1985 economic stabilization plan, and your brother Shaul, who was head of the budget department. Doesn't it tempt you to enter politics?

"My family has never defined itself as political, and I don’t see myself going into politics either."

Company ID
Sector: Defense Tech
Established: 2024
Founders: Hamutal Meridor, Alon Dror, Jason Manne, Omer Bar-Ilan
Employees: 25
Funding: $39 million from Sequoia and LUX