Yair Vardi (left) and Guy Katsovich.

Fusion raises $20 million pre-Seed fund for Israeli startups

The new fund is backed by Insight Partners along with 70 serial entrepreneurs and venture capitalists from Israel and the U.S.

Accelerator program Fusion announced on Thursday the final closing of its $20 million fund. Fusion VC invests in pre-Seed startups built by Israeli entrepreneurs. The fund has already invested in over 30 Israeli startups since its first closing last year. Fusion is targeting 60-80 new investments by 2026.
The fund is backed by industry leaders, including global software investor Insight Partners, Gigi Levy-Weiss, Liad Agmon and Ofer Ben-Noon, among 70 other serial entrepreneurs and venture capitalists from Israel and the U.S. The fund’s special advisors include Daniel Shinar, Michael Ronen, Perry Wallack, Hagi Schwartz, Hemi Zucker, Clancey Stahr and Shani Zanescu.
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Yair Vardi Guy Katsovich
Yair Vardi Guy Katsovich
Yair Vardi (left) and Guy Katsovich.
(Bar Cohen)
Fusion invests $150,000 in startups across verticals that are between the idea stage and the initial product/revenue stage. The firm strives to lead the pre-Seed category in Israel by being the first check in and providing a value-add platform for entrepreneurs beyond the capital investment, similar to Y Combinator. Fusion’s platform supports entrepreneurs targeting the American market- with California offices, as well as direct access and introductions to future investors, mentors, advisors and potential clients.
Fusion was founded in 2017 by Guy Katsovich and Yair Vardi. Since then, Fusion has invested in over 100 startups through 12 cohorts, including Agora, DigitalOwl, Base.ai, Innplay Labs and Hoopo. Over 20% of Fusion’s portfolio companies are led by women founders, and over 70% of the companies have completed a successful investment round following the program, with an average of $2.5 million.

Twice a year, Fusion holds a bootcamp in Tel Aviv with leading investors and entrepreneurs. After completing a two-month bootcamp, the participating founders fly to a three-week roadshow in Silicon Valley, New York and Los Angeles, where they meet American investors and mentors.
After completing the accelerator program, founders join Fusion’s alumni network which provides a broad platform of ongoing workshops and forums covering fundraising, management of a company/board in later stages, hiring, sales and partnerships.
“At a time when investments in Israel have declined by 75% compared to last year, we believe it’s a great time to continue investing in Israeli companies and take risks where other angels and venture capital firms may hesitate or stall,” said Guy Katsovich, Co-founder at Fusion. “In the last five years, we’ve been one of the most active ‘under the radar’ investors, and invested in over 100 companies. We plan to continue at the same pace, as opposed to the trend we’ve seen in the last few years: Raising (too) large funds and deploying the capital (too) quickly.”