JERUSALEM - Israeli army reservist Zach Bergerson felt he had to take action when he saw fellow soldiers having to rely on their eyes and ears to detect swarms of enemy drones overhead.

So the high-tech professional, 36, developed a wearable device that uses mobile phone technology to warn troops of aerial threats. Like other reservists, Bergerson has leveraged his civilian expertise and military experience to bolster Israel's defence industry.

Known as SkyHoop, his startup has since emerged from stealth mode - a period when startups typically work in secrecy - to be piloted in Ukraine with discussions under way for a trial by the U.S. Defense Department. 

While U.S. President Donald Trump brokers a Gaza ceasefire, Israeli startups like Bergerson's are drawing investment from U.S. and Israeli venture capital firms and looking to build on a growing European market for Israeli defence exports.

More than a third of all defence tech startups registered with the country's Startup Nation Central, an organization that tracks Israeli innovation, were created since a deadly Hamas attack on Israel on October 7, 2023, launched the war in Gaza.

In June, while Israel attacked Iranian nuclear and ballistic missile targets, their 12-day air war highlighted the efficacy of Israel's aerial defences. Israel successfully intercepted 86% of Iran's ballistic missile launches, the Defence Ministry said.

The changing nature of war has led to shifts in defence procurement worldwide. Western armies demand new battle-tested technology, refined by soldiers in combat. Some 20% of Israeli reservists work in the robust high-tech sector. 

Israeli defence startups have drawn investment from major American venture capital firms that previously avoided the sector as it was considered riskier and mired in regulation. Israeli VC firms have emerged as well to invest in defence. 

Lital Leshem, an Israeli reservist, in December co-founded Protego Ventures, a fund that has studied some 160 defence companies and raised around $100 million. She expects the fund will inv...