Guy Katsovich (right) and Nadav Shimoni.

Nurturing digital health innovation: New Israeli program steps in to address startup decline

The program offers early-stage investment of up to $500,000 through a SAFE model, with Arkin Digital Health and Fusion aiming to invest in 10 new startups this year

In response to a dramatic decline in digital health startups founded in Israel since the beginning of the decade, Arkin Digital Health and Fusion have announced the launch of a new program, combining a rapid investment track and an accelerator. With the goal of injecting life back into the sector, the funds aim to invest in 10 new startups this year.
According to Startup Nation Central data, the number of new digital health startups publicly revealed has been steadily dropping year-over-year. This year, just one company has been officially announced, compared to 27 last year, 72 in 2022, 89 in 2021, and a staggering 126 in 2020.
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Guy Katsovich Nadav Shimoni
Guy Katsovich Nadav Shimoni
Guy Katsovich (right) and Nadav Shimoni.
(Tali Talmid)
To address the situation and help Israeli entrepreneurs build startups in the digital health sector, the new program offers early-stage investment of up to $500,000 through a SAFE model, eliminating the need for a formal valuation—a significant advantage compared to typical angel investments of $100,000-150,000.
Beyond the substantial investment, the program provides a comprehensive support system modeled after Fusion's successful seven-year program, specifically adapted for the digital health sector. This includes a roadshow to New York and Boston to forge connections with key players, tailored content addressing the unique challenges of launching digital health ventures, and mentorship customized to each startup's specific needs. The program prioritizes ventures in areas where traditional accelerators are scarce and expertise in the U.S. market is limited.
Dr. Nadav Shimoni, Managing Director of Arkin Group's Digital Health Fund, highlighted a concerning trend: a recent surge in U.S. digital health startups compared to Israel. "We decided that instead of sitting on the sidelines and hoping the situation will improve that we wanted to be proactive and try to help."
Guy Katsovich, co-founder of Fusion Fund, emphasized the value of the accelerator program's iterative approach. "This validation process is crucial in every industry to avoid wasting millions on the wrong direction," Katsovich explained, "but especially in healthcare where there's a lack of existing Israeli programs with deep industry knowledge."
Arkin Digital Health is a dedicated digital health fund located in Israel and New York and part of the Arkin Group, a healthcare and life science investment firm operating for more than 15 years with $2 billion in assets under management. Among its portfolio are Nest, Rhino Health, Edocate, Laguna, and Eleos Health.
The Fusion fund and accelerator program, established seven years ago by Guy Katsovich and Yair Vardi, manages investments of $30 million and has already invested in a number of digital health ventures such as DigitalOwl, Behavidence, Feminai and MSICS Pharma.