The Israeli tech funding and M&A ecosystem showed strong momentum in the final week of May 2026, with several notable announcements spanning defense-tech, enterprise AI, ecommerce, and biotech.
Airis Labs Emerges from Stealth with $60M
The most headline-grabbing story: Airis Labs, an Israeli defense-tech startup founded in 2023 by former intelligence community veterans, announced a $31 million Series B led by PSG Equity. The round brings total funding since inception to $60 million. Additional participants include TLV Partners (which led the prior round), StepStone Group, Redseed Ventures, and angel investors including Mellanox founder Eyal Waldman.
Airis Labs develops an AI platform that analyzes unstructured visual data from drones, security cameras, body cams, and social media in real time, turning fragmented footage into searchable, actionable intelligence. The company currently employs ~50 people, mainly in Tel Aviv with US operations in the Washington, D.C. area, and aims to double headcount in 2026.
Elbit Systems Acquires Bluewhite Robotics
In a significant defense-tech M&A move, Elbit Systems' subsidiary FUSE completed the acquisition of Blue White Robotics Ltd., a Tel Aviv-based developer of AI-powered off-road autonomy platforms for defense applications. Founded in 2017, Bluewhite developed an OEM-agnostic autonomy platform with extensive operational hours. The financial terms were not disclosed.
Amdocs Acqui-hires Yess AI
Amdocs announced the acquisition of Yess AI, a 2023-founded startup by former AWS Israel executives. The deal, estimated at $8-10 million, brings in a team of 9-13 people including all four co-founders, who will join Amdocs' Generative AI and Data division. The acquisition reflects growing demand for agentic AI capabilities in telecom operations.
Rep AI Raises $6.2M with Zendesk's First Israel Investment
On the ecommerce front, Rep AI — founded by Yoav Oz and Shauli Mizrahi — raised $6.2 million in a follow-on Series A round led by Silicon Road Ventures, with participation from Osage Venture Partners, Flashpoint Venture Capital, and notably Zendesk, marking the company's first investment in an Israeli startup. Rep AI develops a unified AI platform for ecommerce brands, handling the full customer journey from intent detection to post-purchase support.
Phytolon Closes $23.6M Series B
In biotech, Yokne'am-based Phytolon closed a $23.6 million Series B led by an undisclosed strategic investor. The company produces natural food colors through precision fermentation; its flagship Beetroot Red has received FDA approval. Total funding to date now stands at $43.6 million, with existing investors including Millennium Foodtech, NGN, Colorcon Ventures, and Yossi Ackerman participating.
The Bottom Line
The final week of May 2026 painted a mixed but active picture: large defense-tech rounds (Airis Labs, Elbit/Bluewhite), strategic acqui-hires (Yess AI), ecommerce AI follow-ons (Rep AI), and biotech scale-up (Phytolon). The common thread across nearly all transactions was AI technology — reinforcing the broader trend of AI penetration across every sector of the Israeli economy.
