Protego Ventures Closes $125M Fund for Israeli Defense Tech

Defense technology venture capital has surged into the mainstream, shattering previous norms where military spending and private equity rarely intersected. The first quarter of 2026 saw record-breaking deal activity in this sector, prompting a wave of new firms emerging globally to focus exclusively on defense startups. Among these is Protego Ventures, a two-year-old Israeli firm that positions itself as the nation’s largest dedicated defense tech venture capital fund. Led by managing partners Lital Leshem and Lee Moser, Protego recently finalized the closing of its inaugural fund, securing $125 million in capital commitments.

This financial foundation allows Protego to deploy between $5 million and $50 million per investment, targeting startups that address urgent security requirements for both Israel and international markets. The strategy was shaped significantly by the performance of its initial portfolio company, drone manufacturer XTEND. After XTEND went public on the New York Stock Exchange earlier this year, it emerged as a potential “fund maker,” capable of generating returns equal to the entire fund. Consequently, Protego deliberately capped its raise below the initial $150 million target. By keeping the fund smaller, the impact of a single major success is amplified rather than diluted across a larger investor base. “Nobody wants to share the pie,” Leshem stated, highlighting the strategic decision to maximize upside potential for existing backers.

The genesis of Protego was catalyzed by the events following the October 7, 2023, Hamas attack on Israel. According to Leshem, Ares Management, which contributed a $30 million limited partnership stake, encouraged Leshem and Moser to collaborate. They operated with the conviction that technological innovation would be critical to enhancing Israel’s defensive capabilities against evolving threats. This early backing enabled immediate deployment of capital. Beyond XTEND, Protego’s portfolio includes ASIO, a developer of situational awareness systems that has formed partnerships with Anduril Industries.

The reception from established defense entities has been notably positive. “On the military side, there is a lot of respect, and people are coming , even under the radar , to talk to us, to learn from us, to train with us, and for sure get our technology and innovation,” Leshem noted. The founders leverage deep industry networks to navigate the complex landscape. Moser continues her role as a managing partner at generalist VC firm AnD Ventures, while Leshem brings a unique perspective grounded in her military service. She served as a reservist during the initial attacks, an experience that fundamentally altered her understanding of modern warfare. “Everything changed on October 7,” Leshem explained. “And basically until the delivery room, I was there, witnessing and getting the first-row seat to how the battlefield acted differently from what I knew in the past decade.”

While Protego dominates the current narrative, competition is intensifying. The Israeli government has recognized the shift toward defense-tech investing, recently awarding approximately $33 million in state guarantees to firms like Adir Capital and Sling Capital to support military and dual-use technologies. Although Protego had progressed too far in its fundraising cycle to participate in the government tender, it remains poised for expansion. The firm is already preparing to launch a second fund in the first quarter of 2027. Backed by Israeli institutional investors and a significant commitment from a U. S. entity, this next vehicle will broaden its scope to include early-growth American defense companies.