Elron Ventures

Rafael-Elron Partnership Shifts Gears: RDC to Explore Acquisitions of Defense-Tech Companies

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[Photo above: Lisya Bahar Manoah, Chairperson, Elron Ventures & Managing Partner, Arieli Group & Yaniv Schneider, CEO, Elron Ventures]

As part of the publication of its 2025 annual report, Elron Ventures announced a strategic shift in its joint activity with RDC, its long-running partnership with Rafael. The company said that, alongside its role as an investor in early-stage technology companies, it now intends to expand RDC’s activity into mergers and acquisitions, with a particular focus on examining controlling stakes in early-stage defense-tech companies. According to Elron, the move has been approved by the boards of Elron and RDC, and remains subject to approval by Rafael’s board as well as the required regulatory clearances. Elron also said it expects to complete between one and three exit transactions from its portfolio over the next 12 months, including secondary deals.

RDC is a joint venture between Elron and Rafael that has been operating for more than three decades. According to the company, Elron holds 50.1% of RDC and Rafael holds 49.9%. The partnership was designed to combine Elron’s investment and venture-building capabilities with Rafael’s technological, engineering and industrial strengths. Over the years, RDC has served as a platform for launching ventures, investing in technology companies and commercializing Rafael technologies in civilian markets. The company says RDC also holds rights to commercialize Rafael technologies in civilian markets, and that the partnership benefits from access to Rafael experts for technology due diligence, joint development with portfolio companies, and in some cases connections to first customers or defense markets with high barriers to entry.

In practice, each side contributes a different layer to the partnership. Elron brings the investment platform, company-building support, work with entrepreneurs, board involvement and portfolio management. Rafael contributes engineering know-how, expertise in areas such as defense systems, sensing, autonomy, software and infrastructure, as well as the ability to help evaluate technologies and open doors to defense and government markets. Over the years, a range of companies have grown out of RDC or with its support, and the current portfolio includes, among others, CyberRidge, Wonder Robotics, Red Access, Tamnoon and OpenLegacy.

The strategic shift now announced by Elron marks a move away from an emphasis on minority stakes toward a model that may also include controlling holdings. According to the company, the rationale is that in defense tech, where development cycles can be long, markets are sensitive and barriers to entry are high, control can enable deeper company-building and value creation than a small financial stake. The move also fits the broader market backdrop: rising global defense budgets, growing venture capital investment in defense technologies, and increased M&A activity in the sector. From Elron’s perspective, the change is meant to add a new growth engine to the partnership with Rafael, rather than limiting it to sourcing companies and participating in funding rounds.

Elron defines its current focus around defense tech, deep tech, cybersecurity, software, and to a lesser extent a legacy portfolio of medical device companies. Founded in 1961, the company says it has completed more than 20 exits with an aggregate value of over $2.8 billion since 2010. Today it holds, directly and indirectly, 26 portfolio companies, including through CyberFuture, the cybersecurity investment club it established with a group of global chief information security officers.

The annual report presents 2025 as a relatively positive year for the company. Elron posted net profit of about $9.3 million, following exits that generated roughly $40 million in proceeds. During the year, it made two new investments, in Addionics and CyberRidge, alongside seven follow-on investments. It also reported a new 2026 investment in cybersecurity company Raven. According to the figures presented by the company, its consolidated NAV stands at about $183.9 million, of which about $54.9 million was in liquid resources as of mid-March 2026. The company also returned about $15 million to shareholders during 2025 through dividends and share buybacks.

Looking ahead, Elron is trying to maintain several tracks at once: continuing to invest in growth companies across cybersecurity, deep tech and defense tech; pursuing exits from parts of the portfolio; and at the same time building a new layer with Rafael around acquiring and holding companies. The move still requires approvals and will need to prove itself in execution, but it clearly signals the new direction of the partnership between the two companies.

Elron Ventures Enters Addionics as Strategic Investor, Targeting Defense and Space Markets

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Elron Ventures has entered Addionics as a strategic investor as part of a pre-Series C round, in a move aimed at supporting the company’s preparations for a larger financing round ahead. The size of the investment was not disclosed. The transaction is intended to accelerate Addionics’ operations and sharpen its focus on strategic markets, particularly defense and space, where advanced batteries are considered mission-critical components.

The round is defined as a pre-Series C—an interim stage typical of deep-tech companies that have already achieved initial market adoption and are preparing for a significant capital raise to support global expansion, increased manufacturing capacity, and deeper penetration into strategic markets. For Addionics, this phase represents a shift from a primary focus on civilian and infrastructure applications toward domains in which energy performance directly impacts operational capability, most notably defense and space.

To date, Addionics has raised approximately $80 million from strategic and industrial investors, including GM Ventures and Deep Insight, alongside global partners from the automotive, materials, and industrial sectors such as Avery Dennison, Scania, Magna, Novelis, and JX Nippon. Elron’s entry is expected to enhance Addionics’ access to investors and strategic partners from the defense ecosystem.

At the core of Addionics’ technology is the development of smart metals and three-dimensional current collectors for lithium-ion batteries, replacing flat metal foils with an advanced porous architecture. This structural redesign improves electrical conductivity within the cell, enables more efficient heat dissipation, extends battery lifespan, and supports high-power charging and discharging—without altering battery chemistry or requiring changes to existing manufacturing lines. This chemistry-agnostic approach is considered a significant advantage in conservative markets such as defense and space, where lengthy qualification cycles often slow the adoption of new technologies.

In defense applications, battery requirements extend far beyond those of the civilian market. Unmanned systems and military drones demand extreme energy-to-weight ratios, the ability to handle high-power discharge, and reliable operation under heat, cold, vibration, and fluctuating loads. In these environments, batteries are not merely power sources but determinants of range, loiter time, sensing capability, and operational survivability. Addionics’ ability to deliver high power without compromising stability or cycle life positions its technology as a relevant solution for next-generation electric and hybrid military platforms.

The demands in the space sector are no less stringent. Satellites, particularly those in low Earth orbit, operate through sharp charge-discharge cycles over many years, under constant radiation exposure and without the possibility of maintenance. Any battery failure can result in complete mission loss. The combination of thermal stability, mechanical robustness, and predictable long-term behavior makes Addionics’ structural approach attractive for space applications, where reliability takes precedence over all other considerations.

The move into defense and space complements Addionics’ broader growth strategy. Only recently, the company announced a collaboration with South Korea’s PNT Materials to develop prismatic LFP battery cells for data centers and large-scale energy storage systems—a partnership that underscores the flexibility of its technology across energy-intensive markets, from AI infrastructure to mission-critical systems.

Elron Ventures views Addionics as part of a broader strategic push toward deep-tech and technologies of long-term industrial and security relevance. As part of the investment, Lisya Bahar Manoah, Chairperson of Elron Ventures and MP of Arieli Group, has joined Addionics’ board of directors, strengthening the company’s strategic guidance at a pivotal stage and reinforcing the link between its technology platform and highly regulated, performance-driven markets such as defense and space.

According to Bahar Manoah, the investment reflects Elron’s focus on deep-tech companies with a clear path to growth and scale. “Addionics’ solution is based on a physics-driven, chemistry-agnostic approach that does not require changes to existing manufacturing processes,” she said, adding that this combination enables improved power and energy density while positioning the technology for rapid adoption in markets such as space and defense.
Dr. Mosheial Biton noted that Addionics is now entering its next growth phase and expressed confidence in the company’s ability to lead the field and set a new standard for high-performance batteries for defense and space applications.

Elron Ventures to Launch CyberFuture to engage CISOs in VC decision-making

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Elron Ventures, investors in early-stage tech startups in the cybersecurity and B2B software space, announced the CyberFuture alliance that brings investors and prominent CISOs from leading brands to entrepreneurs in a unique way. 

Backed by Elron Ventures, the alliance empowers security practitioners to vet and influence investment decisions, as well as support the selected early-stage companies. CyberFuture Alliance members represent a wide range of industries across the globe, such as banking, tech, retail, travel, healthcare, pharma, and more. Alliance members include Vijaya Kaza, Chief Security Officer, Head of Engineering for Trust & Safety at Airbnb, Gerhard Eschelbeck, former CISO at Google, Jairo Orea, Global CISO for Royal Caribbean Group, Al Ghous, CISO for Snapdocs, Yaron Levi, CISO for Dolby Laboratories and Ilan Abadi, Global CISO at Teva Pharmaceuticals.

For entrepreneurs, direct access to CISOs immediately translates into real-world market insights, accelerating the time to product-market fit and sharpening product focus. CyberFuture facilitates the matching of the relevant cybersecurity leaders with the selected startups, to benefit from such insights.

With CyberFuture, companies can continue forward without having to compete with other companies who are vying for CISO attention. Elik Etzion, Managing Partner at Elron and former Global CISO for Israel’s largest financial institution, Hapoalim Bank, is familiar with the CISO-to-investor gap. “We intentionally kept this alliance to a smaller, high-quality group, allowing each involved CISO to be active in decisions and work as a team,” said Etzion. “At Elron Ventures, we are not only financial backers but fellow practitioners who want to see today’s most viable early-stage solutions succeed.” Elik believes that the alliance will generate a unique value for the supported startups by crystallizing the product offering, networking, and design partnership opportunities, and navigating the go-to-market motion in global markets.

“The CyberFuture initiative is a win-win for both security leaders and entrepreneurs,” said Vijaya Kaza, Chief Security Officer, Head of Engineering for Trust & Safety at Airbnb. “It gives security leaders the opportunity to influence investment decisions and shape the future of cybersecurity, helping to stay ahead of emerging threats. At the same time, entrepreneurs leading the charge in cutting-edge innovation can benefit from the real-world expertise and guidance of security leaders who are on the front lines every day.”

Elron acts as the back office, bringing the expertise of professional investments in early-stage startups. “Sitting in the seat of ‘CISO as an Investor’ gives a new perspective on what is possible,” said Gerhard Eschelbeck, former CISO at Google. “Traditionally, we as CISOs wait to see if new tools are developed for our specific needs. Here, we get to find those special ideas while they are incubating and help create a stable foundation to address critical wide-scale challenges.”