Israeli defense electronics company Rafael Advanced Defense Systems has signed a collaboration agreement with Haifa-based startup Lulav Space for the development of a drone interception system, sources close to the matter have told "Globes." For Rafael, this is a major project that could be a force multiplier for it in the field.
Lulav Space, founded in 2021 by engineers from the Beresheet 1 Space IL project, is developing precise guidance and navigation systems based on vision and image analysis. The company has raised $1.5 million from Angular Ventures, and has become a prominent player in the field of space exploration sensors - its systems are lighter, more efficient and cheaper than those based on radar or lidar (laser-assisted measurement).
The sensors Lulav Space has developed can operate in all satellite orbits from a low altitude of 200-2,000 km (LEO), to an altitude of 36,000 km (GEO). The company has been chosen to provide landing sensors for the "Beresheet 2" mission, which was suspended in April.
In March, Israeli aerospace company Parazero Technologies (Nasdaq: PRZO) signed a non-binding letter of intent (LOI) to acquire Lulav Space. The deal, which is subject to due diligence and final agreements, was due to be completed in the second quarter. The purpose of the Lulav acquisition was to add autonomous guidance capabilities and EO/IR sensor systems (Electro-Optics/Infrared) for ParaZero's anti-UAV protection system DefenseAir.
The main advantage: navigation without GPS
Lulav's autonomous navigation capabilities are not dependent on GPS, which is a critical advantage in airspace saturated with disruptions. Measures such as jamming (disruption of communications) or spoofing (injecting false signals) directly harm the control and navigation capabilities of drones and UAVs.
In jamming, communication between the operator and the vehicle is disrupted, until the drone lands or crashes when the battery runs out. In spoofing, an incorrect signal is sent that diverts the drone from its course. Israelis suffered the consequences of such disruptions during periods of escalation with Hezbollah and Iran, when civilian navigation applications like Waze were disrupted.
Along with the new collaboration, Rafael recently established a dedicated directorate for threats at extremely low altitude ranges, within the company's Air Defense Division. The division responsible for Iron Dome, David's Sling and the Spider system, which was recently chosen by the Romanian Ministry of Defense in a deal worth €1.9 billion, will also integrate the Iron Beam laser defense system into Israel's multi-layered air defense array, towards the end of 2025. "This cooperation creates synergy between Rafael's R&D capabilities, knowledge and operationally proven systems - and the flexibility, creativity and technological innovation of Lulav Space," explains Rsafael VP and Managing Director C-UAS & Low Altitude Air & Missile Defense Systems Yossi Margalit. "This combination will allow us to quickly develop interception solutions for an evolving range of enemy scenarios, cheap and effective solutions at a level never before seen on the global market."
Lulav Space cofounder and CEO Dr. Noam Leiter says that the company sees the agreement with Rafael as a leap forward. "It allows us to bring to move ahead with the unique capabilities we have developed - technology that will help break into new markets and reduce barriers to entry, especially in terms of price. We are currently working with the director of the Israel Low Altitude Defense Administration on integrating a variety of new applications with advanced technology for intercepting drones and UAVs, from the level of a single threat to protection against a swarm of threats."
Is demand moderating following the war?
Rafael is working to expand its collaborations with various Israeli startups, and not only in the field of air defense. On deep tech, for example, which has raised more than $560 billion in the last decade in the US, the company is collaborating with Israeli investment company Elron Ventures to enable tech startups to reduce the risk gap between early development and commercial implementation.
Looking ahead, Markets and Markets estimates that the market for dealing with UAVs is expected to grow from $4.5 billion annually today to $14.5 billion by the end of the decade. Rafael hopes that the new partnership will help it capture a major share of this developing market.
Published by Globes, Israel business news - en.globes.co.il - on August 18, 2025.
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