Fusion VC Research
Investment Thesis
Fusion VC positions itself as "Israel's leading pre-seed platform," a hybrid accelerator-fund model founded in 2017 by Guy Katsovich and Yair Vardi. The firm's stated mission is to back "first-time Israeli founders who are tapping into non-traditional industries" -- explicitly seeking technical, first-time operators building in overlooked or unglamorous verticals rather than chasing the current hype cycle. Fusion runs a highly selective, cohort-based program: roughly 1,200 companies apply annually for fewer than 20 slots. Selected founders receive capital plus a structured 10-week intensive bootcamp in Tel Aviv (with acceleration touchpoints in California and New York), backed by a network of 300+ operating mentors, an LP advisory board, and dedicated in-house functions spanning storytelling/pitch coaching, sales development, design, and even a "Fund Psychologist" role -- an unusually hands-on operating model for a fund of this size.
Stage Focus
Fusion invests exclusively at pre-seed. The firm explicitly frames itself as the first institutional check for first-time Israeli founders, ahead of traditional seed funds.
Check Size
The core program invests $150,000 for 7.5% equity per company. A specialized Digital Health track, run in partnership with A-Squared (Arkin Capital), writes larger checks of $500,000 structured as a $400,000 SAFE at a $2.5M valuation cap plus a $100,000 uncapped SAFE with an MFN clause (released after the startup raises an additional $250K). Fusion also runs a second specialized track, an AI/"Vibe Coding" track in partnership with Base4U.
Lead Tendency
Fusion typically writes the first institutional check into a company, making it a de facto lead investor at the pre-seed stage even though its checks are structured and program-based rather than negotiated lead terms in the traditional sense.
Recent Activity
Fusion publishes actively to a Substack blog (blog.fusion-vc.com) documenting its portfolio and investing philosophy. Recent posts span an original "State of Israeli Pre-Seed 2025" market report (March 2025), multiple founder-lessons essays through mid-to-late 2025, and portfolio spotlights on FeminAI (a $1.65M healthtech grant recipient, November 2025) and LeanCon (an AI construction-planning startup working on $650M+ of projects, October 2025). The most recent dated public post is from November 2025. The firm's next cohort is slated for "Q1 2027," indicating continuous, batch-based deployment rather than a traditional discrete fund-close cycle.
Portfolio Highlights
Fusion has funded 140+ startups with a combined valuation exceeding $3 billion, and portfolio companies have gone on to raise $500M+ in follow-on capital. Notable exits include Digital Owl (AI-driven medical data analysis, acquired by Datavant for $200M+), Innplay Labs (mobile gaming studio, acquired by Playtika for ~$300M), Spetz (HR candidate management, acquired by Paradox), and LoudnClear (customer data/engagement SaaS, acquired by Forwrd). The active portfolio spans an unusually wide range of sectors for a single fund -- fintech and payments infrastructure (StreamPay, Leprecon, WiserPay, Fluxmap, Legacy, Copay, Obol, Hoox, NewHedge), applied AI and vertical AI tools (SK8, Gravix, Midbound, Kadabra, LightSite AI, DataSpan, Baz), digital health and wellness (Era, The Oak, No Barrier, FeminAI, Idan, Sequel Care, Dux, HeyBonds), security (Acsense, DeviceTotal, Clarity, eLoomina, Sequent), proptech and climate/energy (Agora, LeanCon, ApplyDesign, Layla, SetPoint, NewLight, Elements, GreenQ), gaming (WaveClear, Solan Games, Crater Studios, Gavra Games, In The Game), and defense/deep tech (Skapion counter-swarm air defense, SpaceBackend, DiGrobotics). This breadth is consistent with Fusion's stated thesis of backing founders in non-traditional industries rather than a narrow sector focus.
Team
Fusion's core operating team is unusually large and functionally specialized for a pre-seed fund of its size:
- Guy Katsovich -- Founding Partner
- Yair Vardi -- Founding Partner
- Amit Shechter -- Principal (primary author of Fusion's public research and portfolio content)
- Noa Dror-Lorber -- Business Operations
- Tal Havusha Barak -- Marketing
- Shani Shabi -- Director of Design
- Eldad Rom -- Fund Psychologist
- Naama Zalzman -- Leadership & Organizational Consultant
- Ori Luzia -- Director of Storytelling (Portfolio Platform)
- Sydney N. Fulkerson -- Director of Investors' Decks & Messaging
- Andrew Brown -- CFO
- Alex Shandrovsky -- Director of Sales Development
- Shani Zanescu -- Advisor/LP (Climate Tech)
The firm's LP advisory board includes notable industry figures such as Jeff Horing (Insight Partners), Hemi Zucker (OCV Partners, J2 Global), Hagi Schwartz (Insight Partners), Michael Ronen (SoftBank Vision Fund), and Daniel Shinar (Claltech, Access Industries), alongside a 300+ person mentor network.
Decision Process
Given the scale of applicant volume (1,200+/year for <20 slots) and the presence of a formal, multi-function internal team, Fusion's selection process most closely resembles an investment-committee model rather than a solo-GP decision, though the two founding partners appear central to final calls.
Founder Preferences
Fusion explicitly seeks first-time Israeli founders building in non-traditional or overlooked industries, with a strong bias toward technical operators willing to do hands-on go-to-market work themselves -- reflected in blog content like "900 Sales Calls, Zero Shortcuts: Why Founders Must Sell Their Own Product."
Geographic Focus
Fusion is headquartered in Tel Aviv, Israel (65 Menachem Begin St), with a U.S. registered entity in Dover, Delaware. The firm exclusively backs Israeli founders but runs acceleration touchpoints and a planned 2026 roadshow in the U.S. (California, New York) to support portfolio companies' entry into the American market, particularly for the Digital Health track.