Accelerator program Fusion announced today the final closing of its $20 million fund for investment 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 intends to remain the most active pre-seed platform in Israel 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 US. The fund’s special advisors include Daniel Shinar, Michael Ronen, Perry Wallack, Hagi Schwartz, Hemi Zucker, Clancey Stahr and Shani Zanescu.
Fusion invests $150,000 in startups 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 US 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, 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.
Katsovich said, “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. 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.”
He added, “We want to replace the ‘friends and family’ round, and be the first to give startups a check with the incorporation. Venture capital firms are not the first check in most startups – They lead the first ‘institutional round’. Today more than ever, first-time founders or those who work in verticals that Israeli investors aren’t familiar with, need to secure initial capital in order to achieve compelling milestones before they are “VC-ready”. At Fusion, we have 200 founders who can testify to us being the real first investors and providing support along the way.”
Published by Globes, Israel business news – en.globes.co.il – on June 1, 2023.
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