Protego Ventures Closes $125M Debut Fund to Capitalize on the Global Defense Tech Boom

The intersection of venture capital and military defense has undergone a profound transformation over the past several years. Once viewed as an incompatible pairing due to ethical reservations, institutional mandates, and long development cycles, defense technology has emerged as one of the most heavily capitalized sectors in global finance. Driven by shifting geopolitical dynamics, asymmetric warfare, and rapid advancements in artificial intelligence, autonomous systems, and advanced hardware, defense tech venture capital dealmaking achieved a historic milestone in the first quarter of 2026. This financial surge has paved the way for specialized venture capital firms worldwide dedicated exclusively to sourcing, funding, and scaling early-stage security and defense startups.

Among the prominent beneficiaries of this paradigm shift is Protego Ventures, a two-year-old investment firm positioning itself as the first and largest dedicated defense technology venture capital fund in Israel. Co-led by general partners Lital Leshem and Lee Moser, Protego recently announced the final close of its debut fund, securing $125 million in capital commitments. The milestone highlights both the growing institutional appetite for national security innovation and the unique positioning of Israeli founders within the global defense ecosystem.

Strategic Fund Sizing and High-Impact Returns

Protego’s $125 million vehicle is strategically sized to deploy individual checks ranging from $5 million to $50 million per company. The firm targets early-stage and growth-stage startups addressing the critical security and defense needs of both Israel and the broader global community.

Notably, the firm deliberately stopped short of its initial $150 million fundraising target. This decision was driven by the early and dramatic success of its maiden portfolio company, drone manufacturer XTEND. Earlier this month, XTEND successfully completed its public listing on the New York Stock Exchange (NYSE), a major milestone that instantly validated Protego’s investment thesis.

By keeping the fund size capped at $125 million, Protego maximized the impact of XTEND’s public debut on its overall fund returns. With XTEND tracking as a potential "fund maker"—an investment capable of single-handedly returning the entirety of the fund’s capital—raising additional capital would have diluted the upside for existing limited partners. As Lital Leshem succinctly noted regarding the decision to forgo a larger pool of capital, "Nobody wants to share the pie."

The Genesis of Protego Ventures: October 7 and Beyond

The origins of Protego Ventures are deeply intertwined with the geopolitical trauma and operational awakening that followed the October 7, 2023, Hamas attack on Israel. In the immediate aftermath of the tragedy, global investment firm Ares Management recognized an urgent need to modernize and reinforce Israel’s military infrastructure through next-generation technological integration.

Ares approached Leshem and Moser with the conviction that private capital needed to mobilize quickly to back homegrown defense innovators. To jumpstart the initiative, Ares committed $30 million as a foundational limited partner, providing Protego with the immediate dry powder necessary to begin deploying capital into the ecosystem.

For Leshem, the catalyst was not merely financial but profoundly personal. On the morning of October 7, while pregnant, she was mobilized as a military reservist. Deployed directly into active service, she served until she was admitted to the delivery room. That frontline perspective offered her an unfiltered, front-row seat to the modern battlefield—one that operated vastly differently from the strategic paradigms of the preceding decade.

"Everything changed on October 7," Leshem said. Witnessing firsthand the rapid evolution of warfare reinforced her belief that traditional defense procurement cycles were far too slow to address contemporary threats, cementing her resolve to build Protego.

Portfolio Expansion and Strategic Partnerships

Protego’s investment strategy relies heavily on backing companies that can scale globally while solving immediate operational challenges. Beyond XTEND, the firm’s portfolio includes high-potential startups such as ASIO, a developer of advanced situational awareness systems. ASIO has already forged strategic operational ties within the defense sector, including a high-profile partnership with major defense tech player Anduril.

The reception from military circles has been overwhelmingly receptive, according to the firm’s leadership. Military officials, often operating under strict security protocols or "under the radar," have actively sought out Protego to engage with portfolio founders, evaluate emerging technologies, and integrate civilian innovations into military operations.

Navigating the Israeli Defense Ecosystem

The Israeli defense tech landscape is notoriously insular, requiring deep institutional networks, regulatory navigation, and an understanding of security clearance protocols. Protego’s founders are uniquely equipped to bridge the gap between commercial venture capital and military requirements.

Lee Moser brings extensive operational experience as a seasoned venture capitalist and maintains her role as a managing partner at AnD Ventures, a prominent generalist venture firm. Meanwhile, Lital Leshem combines 11 years of high-level experience in the Israeli military and intelligence apparatus with proven commercial acumen. Prior to founding Protego, Leshem co-founded a security and communication startup, Carbyne, which was acquired by Axon in 2025 for $625 million.

This dual expertise in military intelligence and commercial scaling allows Protego to evaluate complex dual-use technologies—innovations that serve both civilian commercial markets and military defense applications—with precision.

The Competitive Landscape and State-Backed Initiatives

Protego will not have the Israeli defense tech arena to itself for long. Recognizing the strategic imperative of nurturing domestic defense innovation, Israeli authorities have introduced state-backed initiatives to stimulate private investment. Recently, the Israeli government awarded venture firms Adir Capital and Sling Capital approximately $33 million in state guarantees designed to drive capital into next-generation military and dual-use technologies. Several other specialized funds are similarly actively fundraising to capitalize on the sector’s momentum.

While Protego chose not to participate in the government’s state-backed tender—having already advanced too far in its independent fundraising cycle—the proliferation of these funds underscores a broader national commitment to maintaining technological superiority.

Looking Ahead: Fund II and US Expansion

With its debut fund fully deployed and validated by early liquidity events like XTEND’s NYSE debut, Protego is already laying the groundwork for its next chapter. The firm is actively planning the launch of its second fund, targeted for the first quarter of 2027.

The upcoming fund will feature a broadened geographic and operational scope, incorporating early-growth American defense technology companies alongside Israeli innovators. Leshem has already secured a significant anchor commitment from a large U.S. institutional investor, complemented by commitments from local Israeli institutional partners.

As defense technology transitions from a niche venture capital subsector to a cornerstone of modern national security infrastructure, firms like Protego Ventures are proving that specialized capital, driven by operators with firsthand battlefield and market experience, can achieve both high-financial returns and critical geopolitical impact.