9 bilateral cooperation in critical sectors for both nations. With a transition from industry to technology taking place in Germany, companies are also looking for opportunities in Israel, especially in AI, Quantum Computing, SaaS, and all advanced technology sectors that are relevant for the German market. “We represent nearly half of the DAX-30 companies in Israel, with many of them managing innovation hubs or corporate venture capital arms that actively operate within the country,” states ERM’s Abelski. “These CVCs and innovation hubs as well as Mittelstand-companies, show particular interest in the areas of cybersecurity, mobility, and artificial intelligence.” “These are hot areas generally, and while Israeli tech has excelled in these in recent years, the interest does not necessarily deviate from the general current attitude towards tech investments. However, there are specific areas that are more indicative of the special nature of the Israeli tech market in the eyes of German investors. Israeli healthtech is such a key area of activity and cleantech/sustainable energy solutions are gaining ever-greater prominence as interests for investments. German investors closely monitor trends and have also taken a particular interest in Industry 4.0.” In the last few years, there have been multiple deals signed across a range of sectors, as Germany and Israel have forged significant partnerships across defense, pharmaceuticals, energy, and cybersecurity. By the end of 2021, Germany’s Schwartz Group had already bought Israeli cyber company, XM Cyber. In June 2023, the medical device sector saw LTS LOHMANN TherapieSysteme AG acquire Sorrel, an Israeli wearable injection device business, as part of its strategic expansion into innovative drug delivery systems. Before the current war, in September 2023, Germany embarked on its largest military export deal with Israel, approving a €560 million procurement of the Arrow-3 air defense system, sealing a commitment totaling €4 billion. Schlote at Bird & Bird, who focuses on German and international VC and venture lending transactions, highlighted a key trend. “There have been notable investments into Israel from investors with a German HQ. For example, Aurora Labs secured USD63 million through a Series C financing round in part from Porsche Automobil Holding SE. Aurora Labs’ AI-based Vehicle Software Intelligence has reinvented how automotive companies, Tier-1 suppliers, silicon vendors and enterprises develop, certify and diagnose software, and conduct over-the-air updates. Ctrl, a London, UK and Tel Aviv based provider of a workspace that allows revenue teams to charge their CRM and customer workflows with automation, AI tools and integrations, raised USD9M in funding from investors, including Earlybird Venture Capital GmbH & Co KG.
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