Deep33 closes $200M fund to bet on Israel's deep-tech future
What's the deal? Deep33, a new Israeli deep-tech venture capital fund, has closed its first fund at $200M — well above its $150M target. Founded in early 2026 by VC investor Lior Prosor and US entrepreneur Michael Broukhim, the fund focuses on AI infrastructure, energy, quantum computing, communication components, and advanced physical technologies.
More than half the fund's investors are from overseas, mostly the US, with some from the UK. It also attracted Israeli institutional backers — a notable shift, given that many of those investors viewed deep-tech and hardware as too complex and risky just six months ago.
About 70% of investments will target companies founded by Israeli entrepreneurs, with the remaining 30% going to US firms. Portfolio companies so far include Particle, QuamCore, Seabridge, and OHR.
Why now? The fund's thesis is that the next wave of innovation won't be software alone. "Many of the most important companies of the next decade will be building the physical world of AI," Broukhim said. "The world will need a lot more energy, a lot more computing, and a lot more infrastructure."
Deep33 believes Israel can become a strategic deep-tech supplier akin to Taiwan's role in chips. "Israel has already proven that it is a leader in human capital, and we believe that it can also be a leader in the physical infrastructure on which the next generation of technology will rely," Prosor said.
What could go wrong? Deep-tech investments are notoriously capital-intensive and slow to commercialise. Hardware startups face long development cycles, complex supply chains, and regulatory hurdles that software companies rarely encounter. Israeli institutional investors' recent enthusiasm could cool if early portfolio companies struggle to reach market.
Geopolitical risk also looms. A fund betting heavily on Israeli-founded companies must navigate the region's instability, which can affect talent retention and customer confidence.
The signal: Deep33's oversubscribed raise reflects growing investor conviction that AI's expansion depends on physical infrastructure — not just models and code. As demand for energy, compute, and connectivity outstrips supply, capital is flowing toward the hardware layer.
The fund has also built a network called Deep to Market, connecting portfolio companies with major tech firms, potential customers, and US government officials. "The idea is to give entrepreneurs access that is not usually available at the beginning," Prosor said. It's a recognition that deep-tech startups need more than money — they need routes to buyers and regulators from day one.
