Elron, Rafael Back $300M Dual-Use Technology Acquisition Strategy

Elron Ventures has approved a major investment plan that could see up to $300 million deployed over the next three years alongside Rafael Advanced Defense Systems to finance an ambitious mergers and acquisitions strategy focused on dual-use technology companies.

The plan, which remains subject to approval by Rafael's board of directors, will be executed through Rafael Development Corporation (RDC), the long-standing joint venture between Elron and Rafael. Under the proposed framework, each partner would contribute up to $150 million, creating a combined investment capacity of up to $300 million.

The initiative follows Elron's announcement earlier this year that it intends to expand beyond its traditional venture investment model and pursue acquisitions of companies developing technologies with applications in both defense and civilian markets. An initial allocation of up to $100 million, split equally between the two partners, is expected to launch the program, subject to final approvals and financing arrangements.

According to Elron, rising geopolitical tensions, increasing defense budgets and growing demand for advanced dual-use technologies are creating new opportunities for companies capable of serving both military and commercial customers worldwide.

The planned M&A activity will focus primarily on acquiring controlling stakes in early-stage dual-use companies, while RDC and Elron will continue investing in emerging firms across cybersecurity, defense technology, deep tech and artificial intelligence.

Elron also said it is evaluating a potential public bond offering, and possibly warrants, to help finance its share of the program. The structure, timing and size of any offering have not yet been determined.

The strategy is intended to complement Elron's traditional venture investment model by adding a recurring earnings component through majority-owned operating companies. The company noted that most of the planned activity will focus on dual-use technologies with significant commercial applications alongside defense uses.

"We are now entering the next phase of our partnership with Rafael," said Lisya Bahar Manoah, Chairperson of Elron Ventures. "Expanding RDC's activities into M&A is a natural next step that we believe can create significant long-term value while supporting the growth of leading companies across defense and civilian markets."

Yaniv Shnieder, CEO of Elron Ventures and Co-CEO of RDC, added: "Demand for defense and dual-use technologies is accelerating worldwide. Together with Rafael, we believe we have a unique platform to identify, acquire and scale companies serving both defense and commercial markets."