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Introduction:
Artificial Intelligence is no longer an emerging technology — it’s the backbone of a new era in global innovation. While sectors like finance, healthcare, and cybersecurity have traditionally attracted venture capital, AI is transforming not only these industries but also how VCs themselves operate. At the forefront of this shift is Shelly Hod Moyal, Founding Partner at iAngels, one of Israel’s most prominent early-stage investment firms. In a recent feature for CTech’s VC AI Survey, she offers a comprehensive breakdown of how AI is reshaping decision-making, investment priorities, and the very fabric of startup evaluation.
Shelly Hod
Shelly Hod Moyal emphasizes that AI will be more transformative than even mobile technology, fundamentally altering how people interact with products through automation, personalization, and conversational interfaces. Entire industries — including law, healthcare, and finance — are already undergoing disruption, and the full scope of change is only beginning.
iAngels, co-founded in 2013 by Hod Moyal and Mor Assia, focuses on early-stage investments across sectors such as AI, FinTech, Cybersecurity, Healthcare, and Software. The team rates AI’s impact on their operations at 6 out of 10 — noting improvements in internal efficiency through AI-driven research, diligence, and content generation, while maintaining that human judgment remains irreplaceable.
The firm has already seen significant exits in the AI domain. Notable examples include:
BioCatch, a behavioral biometrics startup acquired for \$1.3 billion by Permira.
Oddity (NASDAQ: ODD), which utilized deep learning and computer vision via Voyage81 and now holds a \$4 billion market cap.
eToro, a social trading platform leveraging AI, recently went public with a \$5.5 billion valuation.
While AI is often perceived as a standalone vertical, iAngels views it as a foundational layer that permeates multiple industries. Their strategy doesn’t revolve around betting on the next GPT-style model but focuses on startups using AI to solve specific, high-impact problems. The key factor is differentiation: does AI serve as a mere enhancement or as a critical enabler?
When it comes to KPIs, capital efficiency is paramount. With AI, small, agile teams can achieve breakthroughs traditionally requiring large engineering departments. Investors are paying close attention to how much can be achieved per dollar — looking at speed of iteration, product maturity, and early traction.
Valuations are approached with a pragmatic lens. AI alone doesn’t warrant inflated pricing. Unique tech, proprietary data, and defensible IP must be in place. Generic tools and easily replicable models raise red flags.
Financial risk in AI includes not just R\&D but infrastructure costs, regulatory issues, and a crowded competitive landscape. Barriers to entry may drop, but that intensifies competition. Startups that excel are those that build strong communities or partner ecosystems early, ensuring a defensible position in the market.
In terms of subdomains, iAngels invests across the AI stack — from infrastructure to applications in generative tools and computer vision. Israel’s strengths, particularly in cybersecurity, DevOps, and chip design, offer fertile ground for innovation. But Hod Moyal sees the application layer — where AI meets complex real-world challenges — as the most promising for exits in the next five years.
She also stresses the need for founders with speed, agility, and technical depth, rather than those chasing the AI hype. In a landscape evolving this fast, execution velocity is the new moat.
What Undercode Say: The Strategic Core of AI Investing
The insights from Shelly Hod Moyal reflect not just a snapshot of iAngels’ playbook but also a broader VC consensus forming around AI in 2025. Here’s a closer look at what her perspective reveals — and what that means for both startups and investors.
1. AI as Infrastructure, Not Just a Feature
AI is increasingly being treated like cloud computing or mobile — a base layer rather than a niche vertical. This has profound implications for startup founders. You can’t just “add AI” to an existing solution and expect investor interest; AI must be deeply interwoven into the product DNA.
2. The Age of Capital Efficiency
Gone are the days when hiring a battalion of engineers was seen as progress. Today, leaner teams using AI tools are outperforming legacy models. This trend doesn’t just cut costs — it improves time-to-market, fosters agility, and allows startups to experiment at scale. Investors will continue to value high output per unit of capital.
3. Exit Success Lies in Specialization
BioCatch, Oddity, and eToro didn’t just use AI — they built with AI at the core to tackle uniquely challenging problems. The takeaway? General-purpose tools are vulnerable. In contrast, companies addressing niche markets or building complex IP stacks are creating real, defensible value.
4. Regulatory and Ethical Tensions Loom Large
While not explicitly mentioned, the growing regulatory scrutiny in the EU and US suggests that compliance-ready AI solutions could become a competitive edge. Startups should begin integrating governance and transparency mechanisms early — or risk becoming uninvestable in future rounds.
5. Israel as an AI Lab
Israel’s strength in cybersecurity and deep tech is being amplified by AI. More interestingly, the country’s startup culture — known for speed, grit, and technical depth — is perfectly aligned with the demands of AI-driven innovation. This makes Israeli startups a top contender for future unicorns in applied AI.
6. Founders, Not Trends, Make the Difference
The repeated emphasis on founder quality reveals a truth often lost in the AI hype: it’s not the model, it’s the execution. Investors aren’t chasing LLM clones — they’re backing builders who can navigate rapid shifts, revise roadmaps on the fly, and stay grounded in user needs.
7. GTM Is Still King
Many startups fail not because their tech is weak, but because their go-to-market strategies are undercooked. Strong ecosystems, early adoption loops, and sticky communities are now as important as algorithmic performance.
In sum, iAngels — and Shelly Hod Moyal — are helping shape a smarter, more grounded future for AI investing. Their model combines pragmatism with bold vision, and that balance might just be the blueprint for venture success in this next frontier.
🔍 Fact Checker Results
✅ BioCatch was indeed acquired by Permira for around \$1.3 billion
✅ Oddity’s Voyage81 tech is foundational to its computer vision product stack
✅ eToro went public recently and actively integrates AI into its trading infrastructure
📊 Prediction: The Next 5 Years of AI VC
Over the next half-decade, we can expect a massive consolidation in AI investment, with a sharper focus on sector-specific applications. Venture capital firms will shift away from “AI-for-everything” startups to those that embed AI as a necessity, not an add-on. Israel will see at least five new unicorns emerge from the intersection of cybersecurity, generative AI, and health tech. Expect VCs like iAngels to lead early-stage rounds in startups that are as much product labs as they are algorithmic powerhouses.
References:
Reported By: calcalistechcom_095892127fc32bb2b0ea7c2a
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