Protego Ventures, a two-year-old Israeli venture capital firm focused exclusively on defense technology, has completed the final close of its first fund at $125 million, TechCrunch learned exclusively. The firm, which describes itself as Israel's first and largest dedicated defense tech VC, is led by Lital Leshem and Lee Moser. Its portfolio targets companies working on critical defense and security challenges for Israel and the broader international community.
The fund will allow Protego to write checks ranging from $5 million to $15 million per startup, backing companies like drone manufacturer XTEND, which became its first portfolio investment and went public on the New York Stock Exchange earlier this month. Other holdings include ASIO, a developer of situational awareness systems that has formed a partnership with Anduril. The firm deliberately stopped short of its original $150 million target after XTEND's trajectory suggested it could become a "fund maker"—a single investment capable of returning the entire fund's value. Executives from Ares Management provided a $30 million limited partner commitment, giving Protego the runway to begin investing immediately after its formation in the wake of the October 7, 2023, Hamas attack on Israel.
"Everything changed on October 7," Leshem told TechCrunch. She was deployed as a reservist on the day of the attacks while pregnant and remained until just before giving birth, witnessing how the battlefield operated differently from her previous decade of military and intelligence experience. Co-founder Lee Moser, a veteran venture investor, continues to serve as a managing partner at generalist firm AnD Ventures. Leshem, who previously co-founded a startup that sold for $625 million in 2025, brings 11 years of military and intelligence background to the partnership. The firm reports strong interest from defense circles, with military personnel seeking to collaborate, learn, and adopt Protego's portfolio technologies.
The shift toward defense tech investment reflects a broader trend: VC dealmaking in the sector set a record in the first quarter of 2026, with new specialized firms emerging worldwide. Israeli authorities have noticed the same movement, awarding approximately $33 million in state guarantees to VC firms Adir Capital and Sling Capital for investments in military and dual-use technologies; Protego was too far along in its own fundraising to participate in the government tender. Ares executives suggested Leshem and Moser team up to launch Protego based on the belief that new technologies would be essential to strengthening Israel's defense capabilities against evolving threats. Leshem noted that a smaller fund size amplifies the impact of a major success on overall returns—"Nobody wants to share the pie," she said—which made closing at $125 million rather than $150 million strategically advantageous given XTEND's performance.
Protego is already preparing its next move: a second fund planned for the first quarter of 2027, which will have broader scope to include early-growth American defense tech companies and will draw on Israeli institutional investors plus one large U.S. commitment Leshem has already locked down. The firm won't operate in isolation for long, as multiple Israeli funds raise capital for similar defense and dual-use technology bets, but its early portfolio performance and insider networks position it to capitalize on a market where demand for security innovation continues to accelerate. The timing of venture capital's embrace of defense technology raises questions about how quickly commercial incentives can align with national security imperatives, and whether the traditional venture model—built for software scalability—can adapt to hardware-intensive, regulation-heavy sectors without losing its edge.