By Riley Kaminer
When Aaron Kaplowitz ran Global New York, the state’s chief economic development agency, he quickly learned the important role of so-called “dual use” technology: innovations that can be used in both civilian and military contexts.
“The New York Power Authority wanted to understand if the predictive system of Israel’s Iron Dome, which tells you where an incoming enemy missile is going and what to do in response, could be applied to the New York power grid,” Kaplowitz explained to Refresh Miami.
A pilot project was successful, enabling the Authority to predict power outages leveraging the same mission-critical technology powering the Iron Dome. “Now that technology is in every New York State-controlled power station,” he said. “That’s dual use: something that was born out of a defense need and is now making New York State cleaner and more cost-efficient. Israel happens to be a hotbed for dual-use technology because of military needs.”
Kaplowitz left the public sector to launch the United States – Israel Business Alliance, a national organization he still runs with the mission to provide state governors with the opportunity to engage with Israeli businesses.
But in August 2023, Kaplowitz took this engagement one step further, preparing the paperwork to launch 1948 Ventures, a fund to invest in dual-use Israeli startups.
“My plan was to launch it in January or February 2024,” he said. “But when the October 7th attacks happened against Israel, I saw both a need and an opportunity, so I decided to move everything up.” 1948 Ventures officially launched on October 13th and Miami-based Kaplowitz found himself in Israel on October 17th.
What does Kaplowitz mean by “the need”? Israel was caught off guard and had to quickly spring into action. They quickly adapted their tech to the new battlefield, with a focus on updated tools such as drones and perimeter protections.
The opportunity stems from both the favorable market conditions and the chance to support Israel’s citizens and communities in this trying time. “It’s an investor’s market,” asserted Kaplowitz. “Historical trends have shown that over the last 20 years after every military conflict that Israel has engaged in, the Israeli economy goes up. We believe that this is a real opportunity to get in before the major boost in economic activity and growth.”
At first, Kaplowitz thought that most of the 1948 Ventures investors would be interested in the fund to support Israel. But Kaplowitz has realized that investors are increasingly seeing a much broader opportunity in Israel, as it is forced to innovate as it urgently needs to defend itself from new threats.
“Companies, on the one hand, had to develop new technologies. And on the other, companies that had interesting solutions were forced to optimize their operations – things that I think would otherwise have taken them a year they did it in a month. And that to me is incredible.”
Kaplowitz and his core team of three have taken a close look at more than 250 companies, narrowing it down to around 12 and then 8 companies that 1948 Ventures is likely to invest in. The fund has initially been structured as a series of SPVs but ultimately aims to have a more traditional GP/LP structure.
Particularly exciting to Kaplowitz is the trend he has noticed of traditional VCs looking to move into the defense space. “The beauty of dual use is that you can pursue the military market and you can also pursue the civilian market, so it mitigates the risk on the investment. It can accelerate growth for the companies if you have two potential markets, as it just gives you so much more exposure to opportunities.”
And what better place to launch such a fund than South Florida? “Miami has become an exciting place for venture, with a lot of money moving here. When you look ahead at some of the challenges that the city is facing in the years ahead – more people, climate issues, security challenges – this is a great place for dual-use tech. And there’s a rich culture of soft landings for Israeli entrepreneurs who want to make a difference quickly.”
READ MORE IN REFRESH MIAMI:
- Chutzpah meets hustle: Israel’s ‘Startup Nation’ connects with #MiamiTech
- AutoLeadStar revs up with $40M funding round, strengthening ties between Israel and Miami
- Israeli tech shines bright in Miami, the new hub for three hospitality startups
- Kind Designs raises $5M in seed funding to deploy 3D-printed seawalls
