2025 VC Survey“The new American administration is the most pro-business and growth-focused leadership we’ve seen”
2025 VC Survey
“The new American administration is the most pro-business and growth-focused leadership we’ve seen”
Fusion’s Partners Guy Katsovich and Yair Vardi have joined CTech for its 2025 VC Survey to share insights on the Israeli and American synergy.
“The new American administration is the most pro-business and growth-focused leadership we’ve seen in our careers,” said Fusion partners Guy Katsovich and Yair Vardi. “America’s success is deeply intertwined with Israel’s, as evidenced by the 54 private US unicorns founded by Israelis. A reopening of the IPO market could inject much-needed liquidity into the ecosystem, bolstering LP confidence and driving further investments.”
Fusion VC is a venture capital firm and an accelerator for Israeli startups in the United States. It was founded in 2017 and is headquartered in the United States with offices in Israel. Since October 7, 2023, it has made over 30 new investments and followed up with additional funding for 10 of its portfolio companies in 2024.
The duo has shared insights with CTech, which you can read below.
Fund ID
Name of fund/funds: Fusion
Total sum of the fund: $30M AUM
Partners: Guy Katsovich & Yair Vardi
Notable/select portfolio companies (active):
Agora RE, DigitalOwl, ScaleOps, Hoopo, Sampled, Obol, Quack, Acsense, Base, Feminai, Newlight, Pickommerce, Singit, and many more.
Notable exits: InnPlay Labs - Sold for $300M to Playtika.
2024 is almost over. How can you summarize it in terms of the Israeli high-tech industry?
Earlier this December, we hosted our annual Trends & Forecasts Conference in Tel Aviv, bringing together over 400 VC investors. The data underscores the resilience of Israeli tech, with $10.5 billion in M&A deals and over $8 billion in funding through Q3, closely mirroring trends in the US venture scene. However, sentiment in the room was mixed. The ongoing war, alongside political and security uncertainties, continues to challenge fundraising efforts, particularly from foreign investors.
At Fusion, we’ve observed an over-concentration of investments in cybersecurity. Without a diversification of investment trends, the market risks becoming overly skewed towards this sector. Expanding into other industries is crucial for long-term growth.
Looking ahead to 2025 - What challenges and opportunities await the Israeli high-tech sector in the coming year, and how are you, as investors, preparing for them?
The US continues to be the primary target market for Israeli startups, and engaging with US clients from day one is more crucial than ever. We’re seeing an increasing trend of pre-seed companies incorporating in the US early to attract capital and establish a strong foothold. However, logistical challenges, including flight disruptions and costs, mean that Israeli founders must prioritize spending more time in the US to build relationships with clients and investors.
At Fusion, we’re proactively supporting our startups to strengthen their US connections. We provide hands-on guidance to help founders plan impactful business trips and navigate the nuances of the US market. Twice a year, we organize accelerator bootcamps in Tel Aviv and US roadshows for our startups, focusing on critical areas such as fundraising, sales, hiring, and mental resilience. These programs are designed to equip our founders with the tools they need to overcome challenges and seize opportunities in the coming year.
How will new American leadership affect the global high-tech industry or economy? And where does this place Israel and its entrepreneurs?
The new American administration is the most pro-business and growth-focused leadership we’ve seen in our careers. America’s success is deeply intertwined with Israel’s, as evidenced by the 54 private US unicorns founded by Israelis. A reopening of the IPO market could inject much-needed liquidity into the ecosystem, bolstering LP confidence and driving further investments.
What are the three most important things the Israeli government should do today to accelerate the high-tech engine in the coming year?
- Open the skies – Ensure that tech employees can travel to the US at reasonable costs.
- Provide transparency in economic decision-making and avoid surprise legislation that could disrupt the tech sector.
- Foster innovation through targeted incentives and streamlined regulatory processes for emerging industries.
Are there new sectors you see as relevant? Are there any fields you anticipate will weaken significantly in the coming year?
We see massive opportunities in sectors like supply chain, construction, healthcare, education, and gaming, with AI serving as the backbone for many Vertical SaaS solutions. Meanwhile, we believe the Israeli market remains overly skewed toward cybersecurity investments, which could limit diversification and growth.
Is Israel missing out on the AI revolution in the global arms race? If not, what should the local industry focus on to join the global race?
Israel is well-positioned to lead in the AI revolution, especially through Vertical SaaS companies that leverage proprietary datasets to disrupt industries like healthcare, agriculture, education, and energy. By automating manual processes and delivering transformative value, Israeli startups can solidify their role in the global AI landscape. The opportunity is immense, and the trend is still in its early stages.
Could the global IPO drought end in the coming year?
We’re optimistic. The market needs liquidity, and the recent ServiceTitan IPO may signal a shift. A more active IPO market would restore confidence and provide much-needed exits for investors.
From an investor's perspective: will the coming year be better for early-stage startups or more mature companies?
We firmly believe that now is the best time to invest in the Israeli early-stage market. We’re biased, of course, but we plan to continue being the most active pre-seed investor in Israel. Early-stage startups have incredible opportunities to innovate and capture value in a recovering market.
Did you raise fund money in 2024 for an existing fund or a new one? What are your expectations regarding this matter for 2025?
We’ve been actively deploying from our existing fund, making over 30 deals since October 7, 2023, and doubling down on 10 portfolio companies in 2024. We plan to invest in 20–30 new startups in 2025 and will likely raise a new fund by 2026. Fundraising is never easy, but the performance of Israeli startups, even in adversity, makes the pre-seed market a compelling opportunity for both US and Israeli LPs.
How many investments did you make in 2024, and how does it compare to previous years?
Since October 7, 2023, we’ve made over 30 new investments and followed up with additional funding for 10 of our portfolio companies in 2024. We aim to maintain a similar pace in 2025, with 20–30 new deals in the pipeline.
Provide an example of an intriguing investment you made in 2024. What sets this company apart, or what is distinctive about its sector?
We were the first investors in Newlight, a groundbreaking startup in the energy and supply chain sector that participated in our 14th batch. Newlight addresses the shipping industry with a plug-in that transforms conventional diesel engines into hybrid hydrogen-diesel ones, reducing fuel consumption by up to 30%.
The company’s system enables the use of hydrogen as a dual fuel without requiring major engine modifications, offering both economic and environmental benefits. Backed by US strategic investors and non-dilutive grants, Newlight is led by a team of ex-Israeli Navy officers and represents a massive opportunity to reduce the shipping industry’s carbon footprint.
Two notable companies that you think will thrive in 2025. These can be from your portfolio or not.
Company Name: Obol
CEO: Michael Shomer-Schwartz
Sector + Description: Fintech
Obol is revolutionizing cash flow management for finance teams. Despite 95% of teams still relying on inefficient spreadsheets, Obol provides a plug-and-play platform that captures an entire financial infrastructure in under 30 minutes, delivering real-time data, actionable insights, and streamlined workflows. This intuitive solution empowers finance teams to move beyond daily operations and take full control of their cash flow.
Investment Details: Fusion was the first investor with a $150K pre-seed check (Batch #11) and has since doubled down.
Founding Year: 2022
Why 2025 is Their Year: Obol is poised to become a must-have tool for finance teams globally. In just under a year since launch, the company has gained the trust of over 50 customers, including early-growth companies and NASDAQ-listed enterprises. With a strong US-based customer base, outstanding product adoption, and a recent seed round led by a prominent US fintech VC, Obol is set for tremendous growth in 2025. Led by an execution-focused team, Obol is well on its way to defining the future of cash flow management.
Company Name: Feminai
CEO: Karny Ilan
Sector + Description: Digital Health | FemTech
Feminai is transforming breast cancer screening by offering an innovative, wearable, AI-powered tool for early detection from the comfort of home. The solution is cost-effective, operator-independent, and enables swift diagnosis with seamless communication between patients and doctors, making breast cancer screening more accessible than ever.
Investment Details: Fusion was the first investor with a $150K pre-seed check (Batch #13)
Founding Year: 2022
Why 2025 is Their Year: Feminai is poised to transform breast cancer detection in 2025 as it launches in the US, as part of its FDA approval process. Following successful clinical trials at Sheba Medical Center, Feminai is demonstrating its potential to address a disease that impacts 1 in 8 women in the US. By tackling the most common cancer affecting women, Feminai is making early detection more accessible and affordable. Recently, the company gained international acclaim, securing 1st place at the prestigious She Loves Tech competition. With its groundbreaking technology and a dedicated leadership team, Feminai is leading the way in advancing women’s health globally.
