Fusion launches defense-tech fund, offering start-ups up to $2 million in early-stage funding

Israeli VC fund Fusion has launched a defense-tech investment track, offering up to $2 million in early-stage funding. In partnership with Stratos Ventures, the program targets start-ups developing technologies for military, national security, and critical infrastructure applications, providing access to defense networks in Israel, the US, and Europe. The initiative aims to address a funding gap in strategically important areas beyond the narrow group of technologies that currently attract most investment.

Israeli venture capital fund Fusion has launched a new investment track for defense technology start-ups, offering up to $2 million in initial funding. Launched in partnership with Stratos Ventures, the program will provide selected start-ups with investments ranging from $500,000 to $2 million, along with access to defense industry networks and military and government organizations in Israel, the United States, and Europe. The initiative comes as Israel's defense-tech sector continues to attract growing interest from global investors following recent operational experience and increased demand for technologies ranging from autonomous systems to electronic warfare and critical infrastructure protection. Fusion says much of the investment attention remains concentrated in a narrow group of technologies, leaving other strategically important areas without sufficient early-stage funding. The fund aims to address that gap by backing founders working on complex and unconventional defense problems. Investments will be made through SAFE agreements, and selected companies will join Fusion's accelerator program. The investment track covers defense systems, national security, critical infrastructure, homeland security, industrial technologies, advanced materials, supply chains, critical minerals, energy security, maritime and space technologies, geospatial intelligence, data centers, computing infrastructure, biosecurity, and climate resilience. Fusion has already invested in companies including Skapion, Tenna, Hoopo, and Newlight, as well as stealth-stage companies working on compact particle accelerators, autonomous aerial systems, and robotic tactile sensing arrays. Fusion manages approximately $50 million and has invested in around 160 start-ups.