For years, space tech felt like the ultimate “moonshot”: inspiring, technically impressive, but far away from mainstream venture capital. That is changing quickly. SpaceX is reportedly preparing what could become the largest IPO in history, targeting a raise of about $75 billion at a valuation of roughly $1.75 trillion. Reuters also reported that demand for the offering has reached around $150 billion, roughly double the target.
The most interesting part is not only the size of the IPO. It is the story SpaceX is telling investors. SpaceX is no longer being positioned simply as a launch company, or even as Starlink. It is being pitched as a platform for opening entirely new markets: global connectivity, satellite infrastructure and, perhaps most futuristically, AI compute in space. Reuters reported that SpaceX’s IPO roadshow described a potential $23 trillion opportunity around space-based AI initiatives, including data centres and internet infrastructure in orbit.
That may sound like science fiction, but it is becoming a serious engineering conversation. Google’s Project Suncatcher is exploring solar-powered satellite constellations equipped with TPUs and connected by free-space optical links, effectively asking whether large-scale machine learning infrastructure could one day be built in space.
The appeal is obvious. Terrestrial data centres are increasingly constrained by power, cooling, water, land, grid connections and permitting. In orbit, the theoretical advantages are significant: abundant solar energy, less competition for physical space, and the ability to use radiative cooling rather than rely on scarce water or air-based cooling infrastructure. Recent academic work on orbital AI data centres explores architectures powered solely by solar energy, using radiative cooling and shielding to manage heat and radiation.
It is important not to oversimplify this. Space is not magically “cold” in a way that solves every thermal problem. Hardware still needs to survive radiation, micrometeoroids, launch constraints, maintenance challenges and communications bottlenecks. But the direction of travel is clear: as AI infrastructure becomes one of the world’s largest physical buildouts, space is entering the conversation not as fantasy, but as a possible extension of the compute layer.
In other words, space is cool again because it is becoming economically relevant.
It is no longer only about planting flags. It is about solving Earth’s problems from above.
Israel already had its moonshot moment
For Israel, the emotional starting point of the modern space-tech story is SpaceIL and Beresheet.
In 2019, Beresheet became Israel’s first lunar mission and the first attempt by a private company to land on the Moon. The spacecraft launched on a SpaceX Falcon 9, achieved lunar orbit, and was ultimately lost during its landing attempt in April 2019. NASA described the mission as an “incredible accomplishment” and noted that Beresheet carried a small laser retroreflector as part of the mission.
Beresheet did not complete a soft landing, but it did something arguably more important: it changed the perception of what a small country and a small private team could attempt. A country of fewer than 10 million people reached lunar orbit with a privately led mission. That matters.
The follow-up mission, Beresheet 2, has faced funding challenges, but the original Beresheet mission remains a powerful symbol for Israel’s space ecosystem: ambitious, resourceful, technically bold and willing to attempt something that only a handful of countries had ever tried.
From national projects to commercial space
Historically, Israel’s space capabilities were built around national security: satellites, intelligence, communications, aerospace and defence. That foundation is now turning into a broader commercial ecosystem.
StarBurst Aerospace, an incubator and accelerator facilitating connections between space startups and corporates included 120 startups in its mapping of the Israeli space tech ecosystem published in November 2025.
The key forces shaping Israel’s SpaceTech ecosystem:
- Dual-use is becoming the default. Defence and commercial space are increasingly converging, from propulsion and resilient infrastructure to ISR, communications and geospatial intelligence.
- Universities are powering the pipeline. Institutions like the Technion, Tel Aviv University and Ben-Gurion University are helping turn advanced research into practical space-tech applications.
- The ecosystem is spreading beyond Tel Aviv. Emerging clusters in Haifa, Be’er Sheva and other hubs are making Israeli SpaceTech more distributed and nationally rooted.
- Capital is starting to deepen. More local funds, corporate strategics and international VCs are paying attention as Israeli space startups mature from R&D projects into investable companies.
This is exactly where Israel tends to be strong: when deep technical capability, defence urgency, software talent and entrepreneurial speed collide.
The use cases: why space tech is no longer niche
A useful way to understand the breadth of the space economy is the a16z Space Market Map, which breaks the sector into launch, satellites, manufacturing, software, logistics, servicing, resources, exploration, habitation and in-space manufacturing. The important point is that “space tech” is not one market. It is an emerging stack: infrastructure, hardware, software, data and services, with multiple entry points for startups.
Space tech is becoming a horizontal layer across multiple industries.
Defence and national security are the most obvious. Satellites are critical for intelligence, surveillance, missile warning, resilient communications, navigation and battlefield awareness. In an era of contested airspace, drone warfare and geopolitical instability, sovereign space capability is becoming strategic infrastructure.
Geospatial intelligence is another major category. Earth observation can help monitor crops, infrastructure, shipping, borders, construction, climate risk, emissions and natural disasters. Israeli companies already have strong capabilities in computer vision, AI, sensing and data analytics — all highly relevant to extracting value from satellite data.
Connectivity remains one of the biggest commercial opportunities. Starlink showed the world what a space-based connectivity layer can look like at scale. Israeli companies such as hiSky and BeetleSat / NSLComm sit in this broader satellite communications opportunity.
Climate and infrastructure monitoring is becoming increasingly important. Satellite-based systems can detect methane leaks, water leaks, soil conditions, infrastructure stress and environmental changes. This is not just “nice to have” ESG reporting; it can become core infrastructure for energy companies, utilities, insurers and governments.
Space-based computing is perhaps the newest frontier. Companies such as Ramon.Space, which builds space-resilient computing systems, sit directly in the path of a future where satellites are not just sensors or relays, but compute nodes.
Mining and resources are also moving from science fiction to early-stage commercial exploration. The Moon and asteroids may not be near-term commercial markets for most startups, but the technologies developed for space resource utilisation can have applications on Earth too: energy, materials, robotics, sensing and industrial automation.
And then there is science and manufacturing: microgravity experiments, pharma research, advanced materials, optics, quantum, robotics and semiconductors. Some of these markets may take longer to mature, but they are exactly the kind of hard technical domains where Israel can punch above its weight.
The investors are showing up
The capital stack around Israeli space tech is still early, but it is becoming more structured. Earth & Beyond Ventures launched with $125 million to invest in Israeli space and deep-tech startups, with backers including strategic corporates and the Israel Innovation Authority.
Beyond dedicated space funds, the investor base now includes Israeli VCs, international deep-tech and climate investors, corporate strategics, defence-linked capital and government-backed non-dilutive funding.
Why the timing matters
For years, the dominant venture theme was bits over atoms. Software ate the world because it scaled faster, carried higher margins and required less capital than building in the physical world.
But AI is changing that equation.
As code becomes easier and cheaper to produce, pure software moats are becoming harder to defend. Distribution, proprietary data, workflow ownership, regulatory positioning and deep technical complexity matter more. The companies that win may increasingly be those that combine software speed with real-world defensibility.
That shift could benefit categories that combine software with atoms: robotics, defence, energy, semiconductors, advanced manufacturing and also space tech.
Not because space suddenly became easy. Quite the opposite. The difficulty is part of the moat. Hardware constraints, regulation, mission-critical customers, proprietary sensor data, aerospace-grade reliability and long sales cycles are not bugs in this market; for the right team, they are sources of defensibility.
Israel is well suited to that kind of company formation. The country is unlikely to compete with SpaceX on launch, and it does not need to. The more natural opportunity is in the enabling layers: resilient compute, optics, sensors, cyber, AI models, satellite payloads, geospatial intelligence, mission software, defence applications and data infrastructure.
Many of the most interesting Israeli space-tech companies may not look like “space companies” at first. They may look like climate intelligence companies, defence software companies, robotics companies, semiconductor companies or advanced data platforms.
That is what makes the category more investable now. Space is moving from national prestige project to commercial infrastructure.
From moonshot to market
SpaceIL gave Israel its symbolic moonshot. Beresheet did not complete the soft landing, but it proved that a small country, a private team and a resource-constrained ecosystem could reach lunar orbit and capture the imagination of an entire generation.
The next phase is different. It is less about proving that Israel can get to the Moon, and more about proving that Israeli startups can build the infrastructure, data layers and mission-critical technologies that the space economy will depend on.
SpaceX may become the public-market moment that wakes up global investors to the size of the opportunity. But the Israeli opportunity is more focused: build the picks and shovels for the next era of space, from Earth observation and defence to climate, communications, compute and resource exploration.
In a world where software is becoming easier to create, the frontier may shift back toward companies that can combine software speed with hard technical depth. Space tech sits exactly at that intersection.
For Israel, that makes it a sector worth watching closely.
He is a former General Partner at Google Ventures (GV) in Europe, former head of Google for Entrepreneurs in Europe, and founding head of Campus London, Google's first startup hub. Eze writes on Israeli tech, venture capital, artificial intelligence, and founder strategy.
He is also the founder of Techbikers, a nonprofit that brings together the startup ecosystem on cycling challenges in support of Room to Read.
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