Sheba's ARC merges with Redesign Health, Mave raises $34 million, and Israel weighs a tax on tech options

Noa Sheba Medical Center is cashing in on its innovation arm. ARC Global, the startup engine founded at the hospital, is merging with New York's Redesign Health, and Calcalist says the deal is worth tens of millions of dollars.

Noa Good morning, it's Thursday, the twenty-second of October. I'm Noa.

Eli And I'm Eli.

Noa Today, Sheba's ARC joins Redesign Health, cyber startup Mave comes out of stealth with $34 million, Modelyo raises about $17 million, and a tax plan aimed at tech workers' options.

Noa Our lead. ARC Global and Redesign Health announced a merger today. Calcalist frames it as Sheba selling its innovation arm to the American company, with the proceeds going to the hospital and about 10% to the state, under existing agreements on intellectual property deals.

Eli ARC was set up at Sheba in 2019. Calcalist says it supports more than 130 startups, including three unicorns, among them the imaging AI company Aidoc. The portfolio is valued at about $6.7 billion, with eight exits, including Belkin Vision for $330 million and Innovalve for $300 million.

Noa What actually changes hands? ARC keeps running the innovation center at Sheba and keeps its stakes in portfolio companies. The global network, and the rights to set up new innovation centers in other hospitals, move to the merged company.

Eli Redesign Health was founded in New York in 2018 and builds health startups. The companies say the combined business will also buy AVIA, a platform health systems use to evaluate digital products, subject to final approvals. No price was given for that.

Noa On leadership, Stephen Klasko, the former head of Jefferson Health, chairs the board. ARC's founder, Professor Eyal Zimlichman, becomes vice chairman, and Brett Shaheen is chief executive.

Noa Next, cybersecurity. Mave, founded only last year, says it has raised $34 million. That is a $28 million Series A led by Red Dot Capital Partners, with Lumir Growth Partners, plus a $6 million seed round.

Eli Walla reports the seed was led by Dell Technologies Capital and Emerge Ventures. Mave's AI agents pull data from a company's existing security tools, investigate alerts, filter out false alarms, and take actions that human teams have approved.

Noa The founders are Raziel Oren and Guy Eshel. Business Insider says they met in Unit 8200, where Oren was Eshel's mentor. Oren told the magazine, you can't hire your way out of this.

Eli Mave has about 30 employees and plans to double that. The company says it is already signing deals worth a million dollars and more with Fortune 50 companies. It faces other agent-based security startups, such as Dropzone and Prophet Security.

Noa Staying with security, Modelyo has raised about $17 million. CTech and Israel Hayom report the round was led by US-based OlivTree, with Seth Merrin, David Phelps and other investors.

Eli Modelyo builds what it calls a sovereign confidential cloud. The idea is that a bank or a defense agency can run services and AI on someone else's cloud, while the data stays encrypted even during processing, and the customer keeps the keys.

Noa It was founded in 2024, after October seventh, by Benny Meir, Itzhak Aviv and Michael Kiperberg. It has 30 employees and, until now, ran only on its founders' money.

Noa Now to policy. Globes reports the Finance Ministry and the Tax Authority are weighing new taxes, and one proposal aims straight at tech workers.

Eli Under it, employees who do not exercise their options as soon as they vest would pay 30% when they sell the shares, instead of the reduced 25% rate. Globes says it faces opposition from the industry and from inside the Finance Ministry, and Finance Minister Bezalel Smotrich has said he opposes it.

Noa There is more. The Tax Authority treats share sales to secondary investors as employment income, while the industry sees them as capital gains. Globes puts the gap at hundreds of millions of shekels.

Eli And drawing a lesson from the Wiz deal, the Tax Authority wants companies moving intellectual property to the US to reach an arrangement on sharing it, instead of a single tax bill in the billions. Globes notes the debt to GDP ratio rose from about 60% before the war to 68.5% at the end of 2025.

Noa Finally in the top stories, a turnaround. CTech reports JFrog is now worth about $11.5 billion, roughly as much as monday.com and Nice combined.

Eli Between December and February the stock fell by about half, to around $34, as investors worried AI would hurt software and security companies. It now trades around $92, up about 55% this year, and CTech says it is valued at nearly 20 times projected revenue.

Noa CTech's reading is that investors see JFrog's tools, which manage the building blocks of software, becoming more important as AI writes more code.

Noa Now the quick round-up.

Eli Rylo, which builds phone tools for deaf and hard of hearing people, signed a collaboration with Nvidia to develop real-time sign language translation. Calcalist says it recently raised $85 million, for $101 million in total.

Noa Vintage Investment Partners has raised $920 million, taking its assets under management past $4.8 billion, CTech reports, and promoted Tzlil Kovetz and Ilan Leiferman to partner.

Eli At its conference in Berlin, Nvidia unveiled a security architecture for AI agents. Globes says it runs on the BlueField-4 chip, developed at Nvidia's Israel R and D center with technology from Mellanox.

Noa And Thailand is buying IWI's Arbel anti-drone system, according to sources cited by Globes. It would be the system's first operational entry in East Asia. No value was reported.

Noa One thing to watch. Globes expects the options tax proposal to go to the government for a final decision.

Eli It needs legislation, and with the Finance Minister against it, whether it survives will tell tech employees a lot about their next vesting date.

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Noa See you tomorrow morning.