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Introduction: Building What Was Once Impossible
In the heart of Israel’s dynamic startup ecosystem, The Garage is forging a new path through artificial intelligence, pushing the limits of what early-stage innovation hubs can achieve. With its latest initiative, The Cube, this venture capital fund is demonstrating how AI—particularly low-code and no-code infrastructure tools—can help launch ambitious platforms faster and more affordably than ever before. In an exclusive interview for CTech’s VC AI Survey, Eyal Redler, Managing Partner at The Garage, shares how AI is not just a tool for startups, but a cornerstone of their fund’s operational and strategic evolution.
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Eyal Redler of The Garage highlighted how AI has played a pivotal role in enabling the creation of The Cube—a dynamic, secure platform that connects global financial institutions with early-stage founders. This innovation hub, made possible by tools like Base44, exemplifies how AI can empower funds to build complex platforms that previously demanded prohibitive costs or resources. While AI hasn’t replaced human decision-making, it has supercharged the team’s efficiency, capacity, and ambition.
Founded in 2022 by Omer Nagar, Eyal Redler, and Shay Dan, The Garage focuses on pre-seed and seed-stage investments in AI, FinTech, and enterprise tech. Though still in its early years and without any full AI exits, its portfolio includes notable startups like Sedric, Insait, Atlas Invest, AironWorks, Velon, Vayu, Varolio, Pelles, and Tweezr—companies known for integrating strong AI capabilities into enterprise workflows.
Redler emphasized that evaluating AI startups requires different metrics than traditional enterprise tech. Key focus areas include the strength of the technical founding team, access to proprietary data, defensible IP, and the ability to turn cutting-edge tech into business-critical solutions. Unlike traditional metrics like CAC/LTV ratios or sales cycles, AI companies are assessed by KPIs such as model training cost versus revenue, AI-driven efficiency gains, and customer time-to-value.
Valuation of early-stage AI startups is primarily driven by technical potential, founder-market fit, and early customer validation rather than pure revenue. The Garage avoids inflated valuations, instead backing founders with disciplined financial insight. They also remain cautious of several AI-specific risks—such as cloud infrastructure costs, data dependencies, regulatory ambiguity, and the rapid commoditization of foundational models.
The fund focuses on enterprise-oriented subdomains like LLMs for structured data extraction, AI for fraud detection and underwriting automation, and proprietary vertical models that outperform general-purpose LLMs. Redler sees AI as transformative in compliance-heavy sectors like banking and healthcare, where agentic systems and RAG technologies will drive automation.
In Israel, The Garage believes future AI exits will come from enterprise copilots, security platforms, and infrastructure tools. While Israel is strong in Fintech, cybersecurity, and defense applications, there’s a noticeable gap in AI-native products targeting SMBs, logistics, and agriculture. Redler concluded by expressing interest in backing founders who blend technical prowess with commercial instincts, particularly those exploring autonomous enterprise agents.
What Undercode Say:
The Garage’s strategy signals a broader shift in how venture capital firms are integrating AI—not just as an investment vertical, but as a foundational capability. Redler’s remarks reflect a mature understanding of AI’s dual role: both as a disruptive innovation and a critical infrastructure layer for startups and VCs alike.
Strategic Use of AI in Fund Operations
The emphasis on The Cube reveals an important trend: funds are no longer passive checkwriters—they’re becoming platform builders. By adopting no-code AI tools, The Garage has accelerated its ability to engage with founders, structure deals, and onboard institutional stakeholders. This approach could redefine how early-stage investments are facilitated across global networks.
Early-Stage Metrics Reimagined
Unlike traditional SaaS startups, early-stage AI companies cannot be judged by conventional traction alone. The Garage’s approach—prioritizing data exclusivity, defensible IP, and team quality—aligns with the reality that AI startups often require significant upfront R\&D investment and long-term vision before generating revenue. This valuation method is rational and necessary in a space dominated by technical innovation rather than short-term cash flow.
AI Subdomains with High ROI Potential
Redler’s targeted interest in agentic systems, RAG, and verticalized LLMs underscores an understanding of where real enterprise value lies. Rather than chasing consumer hype (e.g., generative art or chatbots), The Garage is doubling down on enterprise workflows—sectors where AI can replace time-consuming manual tasks and meet regulatory thresholds.
The Israeli AI Landscape: Strengths and Gaps
The Garage’s insights into Israel’s AI strength in cybersecurity and Fintech mirror broader trends in the region. However, Redler’s callout of underserved markets—like SMB automation and agri-tech—shows keen market awareness. These “white spaces” represent future unicorn potential for founders who can bring domain-specific AI to traditionally analog industries.
Risk Assessment Beyond Hype
One of the most grounded parts of the interview was The Garage’s honest evaluation of financial and technological risks. Cloud costs, regulatory volatility, and API/data dependencies are often glossed over in AI optimism—but they are make-or-break factors in real-world deployments. Investors who bake these risks into their valuation models will be far more successful in separating signal from noise.
Founder Qualities That Matter
Perhaps the most actionable insight is The Garage’s founder profile: someone who combines architectural depth with go-to-market acuity. This dual skill set is rare but essential. Many AI startups fail not because their models don’t work—but because they can’t commercialize them in enterprise environments.
In summary, The Garage represents a new breed of AI-savvy VC firms that not only fund innovation but build infrastructure to support it. Their commitment to technical excellence, practical ROI, and realistic valuation makes them one to watch in the next wave of Israeli startup success stories.
🔍 Fact Checker Results
✅ The Cube is verifiably built using Base44 and other no-code AI tools, enabling rapid deployment.
✅ The Garage’s portfolio companies like Sedric and Insait are confirmed active AI startups in enterprise verticals.
✅ Israel remains a global leader in applied AI for Fintech and cybersecurity, with dozens of emerging startups in these areas.
📊 Prediction
Within the next five years, The Garage is likely to see multiple portfolio companies reach exit stages, particularly in AI-enhanced enterprise tooling. Expect at least one standout success in the vertical AI or AI infrastructure space—areas where Israeli startups and The Garage have unique strengths. If their thesis on agentic systems plays out, The Cube itself could evolve from a VC innovation hub into a revenue-generating SaaS or service platform, setting a precedent for how venture funds operate in the AI era.
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Reported By: calcalistechcom_5397c496e6fa56ba8358bcbd
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