Key Takeaways
- • Israeli venture capital fund Fusion is launching a defense technology investment program offering startups investments of $500,000 to $2 million through SAFE agreements, developed in partnership with Stratos Ventures.
- • The program targets early-stage defense and strategically important technologies that Fusion says receive less investor attention than drones and autonomous systems.
- • Selected founders gain access to Fusion's accelerator and connections to the U.S. Department of Defense, NATO's DIANA program, the U.S. Army's FUZE program, and Israeli defense primes including Rafael, Elbit Systems and Israel Aerospace Industries.
- • Fusion manages approximately $50 million, has invested in about 160 startups, and says its portfolio valuation exceeds $3 billion, according to figures provided by the fund.
Summary
Israeli venture capital fund Fusion is launching a new investment program for defense technology startups, offering up to $2 million in initial funding along with access to defense industry networks in Israel, the United States and Europe. The initiative, developed in partnership with Stratos Ventures, is aimed at closing a funding gap for early-stage companies working on strategically important technologies that have drawn less investor attention than high-profile sectors such as drones and autonomous systems.
Under the program, selected Israeli startups will receive investments ranging from $500,000 to $2 million through a Simple Agreement for Future Equity (SAFE), a financing instrument that lets startups raise capital before a formal valuation is established. Participating founders will also have access to Fusion's accelerator, which supports business strategy, business model development, fundraising preparation and the establishment of commercial operations. Fusion said it will further connect startups with military officials, advisers, defense organizations and government agencies, including contacts associated with the U.S. Department of Defense, NATO's Defence Innovation Accelerator for the North Atlantic (DIANA) and the U.S. Army's FUZE program. In Israel, the fund plans to facilitate meetings with Rafael Advanced Defense Systems, Elbit Systems, Israel Aerospace Industries and senior defense officials.
The program is open to startups across a broad range of defense-related and strategically significant sectors, including military and national security technologies, critical infrastructure protection, homeland security, data centers and computing infrastructure, advanced materials, supply chains and critical minerals, energy security, power grid infrastructure, maritime and space technologies, geospatial intelligence, Earth observation, biosecurity and climate resilience.
Fusion argues that much of the available venture capital remains concentrated in a narrow range of technologies. Co-founder and managing partner Guy Katsovich said, "We see a significant gap between the potential of founders in this sector and their access to early-stage capital." He added that Israel holds a significant advantage in defense technology given the experience built up within its defense establishment and industries.
Fusion specializes in pre-seed investments and has already backed companies including Skapion, which is developing a mobile system to detect, intercept and neutralize drone swarms; Tenna, which develops software for spectrum intelligence and electronic warfare; Hoopo, which provides tracking systems for unpowered assets such as shipping containers; and Newlight, an energy infrastructure developer for the maritime industry. According to Fusion, which manages approximately $50 million and has invested in about 160 startups, its portfolio valuation has exceeded $3 billion. The new program expands the fund's existing activities into a dedicated track for technologies with military, national security and broader strategic applications.
Under the program, selected Israeli startups will receive investments ranging from $500,000 to $2 million through a Simple Agreement for Future Equity (SAFE), a financing instrument that lets startups raise capital before a formal valuation is established. Participating founders will also have access to Fusion's accelerator, which supports business strategy, business model development, fundraising preparation and the establishment of commercial operations. Fusion said it will further connect startups with military officials, advisers, defense organizations and government agencies, including contacts associated with the U.S. Department of Defense, NATO's Defence Innovation Accelerator for the North Atlantic (DIANA) and the U.S. Army's FUZE program. In Israel, the fund plans to facilitate meetings with Rafael Advanced Defense Systems, Elbit Systems, Israel Aerospace Industries and senior defense officials.
The program is open to startups across a broad range of defense-related and strategically significant sectors, including military and national security technologies, critical infrastructure protection, homeland security, data centers and computing infrastructure, advanced materials, supply chains and critical minerals, energy security, power grid infrastructure, maritime and space technologies, geospatial intelligence, Earth observation, biosecurity and climate resilience.
Fusion argues that much of the available venture capital remains concentrated in a narrow range of technologies. Co-founder and managing partner Guy Katsovich said, "We see a significant gap between the potential of founders in this sector and their access to early-stage capital." He added that Israel holds a significant advantage in defense technology given the experience built up within its defense establishment and industries.
Fusion specializes in pre-seed investments and has already backed companies including Skapion, which is developing a mobile system to detect, intercept and neutralize drone swarms; Tenna, which develops software for spectrum intelligence and electronic warfare; Hoopo, which provides tracking systems for unpowered assets such as shipping containers; and Newlight, an energy infrastructure developer for the maritime industry. According to Fusion, which manages approximately $50 million and has invested in about 160 startups, its portfolio valuation has exceeded $3 billion. The new program expands the fund's existing activities into a dedicated track for technologies with military, national security and broader strategic applications.
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