What Top VCs Really Think About the Israeli Tech Ecosystem

Fusion’s Managing Partner Guy Katsovich shares takeaways from a candid panel with top VCs on what Israeli founders are getting right - and what they keep getting wrong.

Last month, our own Guy Katsovich moderated a panel at Tech1 in Eilat, in front of 200 people from Israel’s tech scene. On stage were three investors every founder should hear from: Amit Karp (Bessemer), Liron Azrielant (Meron Capital), and Sarai Bronfeld (NFX).

We kept the format simple: question → emoji → answer. It was light, fun, and packed with sharp insights.

Here are five things every founder should think about:

#1 Cyber is great, but not the only game in town

Israel has built a "cyber nation" over the years - it’s the default path for many founders. It’s easier to sell, there’s a playbook, and buyers are ready to invest. But when everyone runs to the same field, real innovation gets lost. Founders who could be building in biotech, agritech, or fintech, often end up launching yet another cybersecurity startup.

If you're a founder: Cyber is important, but don’t let it be the only lens you look through.

#2 Agentic AI is not hype, it’s happening

Forget the buzzwords. Agentic AI - systems that act as personal agents, making decisions and doing the work for you, isn’t just a trend, it's already here. The technology is advancing fast: more efficient, cheaper, and in many cases better than people.

The takeaway: Think about the cloud a decade ago. That’s where this is heading. Ignore it, and you’ll get left behind.

#3 Vertical SaaS? Not enough anymore

Once, building a SaaS product for a niche like dental clinics was enough to stand out. Today? That won’t cut it. With development costs dropping and competition rising, you need a real edge. Another generic platform isn’t an edge, it’s a risk.

For founders: Don’t just build a product. Solve a pain so real that users can’t imagine life without it.

#4 Founders don’t have to come from 8200 unit

Yes, there’s a bias in the ecosystem: founders from elite military units like 8200, 81, and Talpiot tend to get the spotlight. But that’s not the whole picture. Some of Israel’s most successful companies were built by people from different paths - pilots, combat officers, or founders with no relevant army background at all.

For investors and founders alike: Great talent comes from everywhere. Don’t let a resume blind you to potential.

#5 B2C in Israel isn’t dead. It’s just ignored

Most Israeli startups stick to B2B because it feels safer, more measurable, and familiar. But AI is opening up new opportunities to build global consumer brands, and not enough founders are going after them.

For the bold: There’s real upside waiting if you’re willing to explore it.

This panel wasn’t just another industry event, it was a reminder for founders to ask themselves: Are you building what everyone else is building, or are you chasing the opportunity no one else sees yet?