Military Experience Powers Tel Aviv Startup Ecosystem

With more startups per capita than anywhere in the world, Tel Aviv is consistently ranked among the world’s leading tech cities, making it a formidable competitor to Silicon Valley, London and Berlin.

At the same time, Israeli startups command an outsized presence on the most important equity exchanges. After the U.S. and Canada, Nasdaq has more Israeli companies than from any other country, and London boasts more Israeli IPOs than from any other foreign nation.

Why the Military Matters

Military service is compulsory for most Israelis, and it usually starts at 18, before university. That gives a large share of the country’s young people several years of shared experience before they ever think about a career, and it’s one of the reasons people point to when they try to explain how a small country produces so many startups.

The argument usually goes like this. Young soldiers are often given real responsibility early, sometimes working with advanced technology in intelligence and technical units. They learn to work in small teams under pressure and to improvise when a plan falls apart. And they come out with a network of people they’ve trusted in difficult situations, which is a useful starting point for finding co-founders, early employees and investors later on.

None of that guarantees a successful company, and plenty of Israeli founders took other paths. But it helps explain why the startup community in a city like Tel Aviv can feel unusually tight-knit, and why its founders often talk about their service when they describe how they learned to build things.

Tel Aviv a Decade On

Tel Aviv has kept its place near the top of the global rankings. Startup Genome, which publishes an annual report comparing startup ecosystems, ranks Tel Aviv fourth among the world’s startup ecosystems and first in the Middle East and North Africa region. It puts the city’s ecosystem value, a measure combining exits and startup valuations from the second half of 2023 through 2025, at $250 billion, against a global average of $25 billion.

The money has kept flowing, too. According to Startup Genome, Israeli tech companies raised about $15.6 billion in private funding in 2025, with much of that activity in Tel Aviv. The same year brought a wave of exits worth roughly $46 billion, which Startup Genome says surpassed previous records and was driven largely by cybersecurity and defense tech deals.

It’s worth noticing which fields led the way. Cybersecurity and defense tech, the areas closest to the military experience described above, were the biggest drivers of those exits.

Government Support Continues

The public sector is still playing a role. Startup Genome reports that in July 2025 the Israel Innovation Authority launched a competitive process to set up new state-backed technology incubators, each eligible for up to $11.9 million in public funding. In January 2026, the government announced a $280 million national AI supercomputer initiative to give startups and research labs access to high-performance computing.

The city is planning ahead as well. Tel Aviv unveiled a new municipal strategic plan in 2025, and Startup Genome says Tel Aviv Global and city authorities have started work on initiatives that include a large tech campus expected to launch in 2026 or 2027.

What Other Cities Can Learn

Most cities can’t copy Israel’s military service, and they shouldn’t try. But the qualities people credit it with can be built other ways: giving young people real responsibility early, putting technical talent to work on hard problems, and creating networks where people learn to trust each other before they start companies together.

Tel Aviv’s story also shows the value of specializing. The city didn’t try to be good at everything. It has deep expertise in areas like security, and that’s where its biggest recent exits came from. For an emerging tech hub, finding that kind of edge can matter as much as the overall amount of funding available.