Protego Ventures Secures $125 Million Final Close for Debut Defense Tech Fund Amid Global Investment Boom

The intersection of venture capital and defense technology has experienced a structural paradigm shift over the past several years, propelled by geopolitical instability, rapidly evolving modern warfare, and a surge in dual-use innovations. Where defense and traditional venture capital once operated in entirely separate silos—separated by bureaucratic red tape, long procurement cycles, and ethical hesitations—they are now inextricably linked. Defense tech venture capital dealmaking achieved record-breaking volumes in the first quarter of 2026, according to data from PitchBook, signaling a permanent realignment in how nations and private markets fund national security.

Against this backdrop of unprecedented market expansion, specialized venture capital firms are emerging globally to focus exclusively on defense-related startups. Among the most prominent of these new players is Protego Ventures, a two-year-old firm that has officially completed the final close of its debut fund with $125 million in capital commitments. Recognized as the first and largest dedicated defense technology venture capital firm in Israel, Protego is strategically positioned at the epicenter of military innovation. Led by co-founders Lital Leshem and Lee Moser, the firm is deploying capital into early-stage and growth companies dedicated to addressing the critical defense and security needs of Israel and the global community.

The Genesis of Protego Ventures and the Post-October 7 Reality

The establishment of Protego Ventures is directly tied to a watershed moment in modern geopolitical history. In the immediate aftermath of the October 7, 2023, Hamas attacks on Israel, the foundational assumptions governing national security, intelligence gathering, and tactical engagement were fundamentally rewritten. Global investment firm Ares Management recognized an urgent need to inject private capital into agile technological solutions that could bolster Israel’s defense capabilities against multi-front threats.

Ares Management played a pivotal role in the creation of Protego by encouraging Lital Leshem and Lee Moser to join forces and establish the specialized fund. To kickstart the initiative, Ares committed $30 million as a foundational limited partner, providing Protego with the immediate financial backing required to begin deploying capital into high-urgency startups without delay.

For co-founder Lital Leshem, the October 7 attacks were not merely a macroeconomic catalyst; they were a deeply personal and immediate reality. Serving as a military reservist, Leshem was deployed while pregnant on the day of the attacks. She remained active in her reserve duties right up until the weeks leading up to her delivery, gaining a firsthand, front-row view of how contemporary battlefields had shifted away from the predictable parameters of the preceding decade.

"Everything changed on October 7," Leshem recounted in discussions with industry analysts. Bringing over a decade of firsthand experience in military and intelligence fields, coupled with her track record as a startup co-founder whose previous venture, Carbyne, was acquired by Axon for $625 million in 2025, Leshem provides Protego with a rare blend of tactical expertise and entrepreneurial acumen. Her co-founder, Lee Moser, brings extensive venture capital experience to the table, maintaining her role as a managing partner at the generalist VC firm AnD Ventures while leveraging her vast investment network to source and evaluate defense opportunities.

Investment Strategy and Portfolio Highlights

Protego Ventures has tailored its fund size to execute a highly disciplined investment strategy. The $125 million capital pool enables the firm to write checks ranging from $5 million to $50 million per company. Interestingly, the firm consciously stopped short of its initial $150 million target. The reasoning behind this capped fundraise lies in the mathematics of venture returns within high-growth, high-stakes sectors like defense tech.

A smaller, more concentrated fund significantly magnifies the financial impact of a single outsized success—commonly referred to in the venture capital ecosystem as a "fund maker," or an investment capable of single-handedly returning the entirety of the fund to its limited partners. By keeping the capital pool leaner, Protego avoids diluting the upside among an unnecessarily broad group of investors. As Leshem succinctly put it, "Nobody wants to share the pie."

This strategy has already been validated by the trajectory of Protego’s very first portfolio company, XTEND. An advanced developer of human-guided autonomous drone operating systems, XTEND achieved a major milestone by going public on the New York Stock Exchange (NYSE) earlier this month. The successful public debut positions XTEND as a prime candidate for a fund-making asset, instantly validating Protego’s thesis that specialized Israeli defense tech can achieve massive global liquidity and commercial scale.

Beyond XTEND, Protego’s portfolio includes high-potential enterprises such as ASIO, a company specializing in advanced situational awareness systems. ASIO has already forged strategic partnerships with major industry players like Anduril, underscoring the cross-border integration and commercial viability of Protego’s portfolio companies within the broader Western defense ecosystem.

Navigating the Defense Ecosystem and Securing Military Trust

Investing in defense technology requires more than just capital; it demands deep institutional trust, regulatory navigation, and an intimate understanding of military operations. For foreign or generalist investors, penetrating the closed-loop ecosystem of military procurement and R&D can prove exceedingly difficult. Protego, however, has leveraged the deep domestic and international networks of its founders to build immediate credibility.

The reception within military and defense circles has been overwhelmingly positive. According to Leshem, military leaders and defense officials have actively sought out the firm—often quietly and under the radar—to engage in strategic discussions, evaluate emerging technologies, train with novel systems, and accelerate the adoption of cutting-edge innovations onto the front lines. This close proximity to end-users allows Protego to perform rigorous technical due diligence, ensuring that the startups they back are solving genuine operational bottlenecks rather than building theoretical solutions.

The Competitive Landscape and State-Backed Initiatives

Protego will not enjoy a monopoly on specialized defense tech investing for long. Recognizing the urgent strategic imperative to maintain a technological edge, Israeli authorities and institutional investors have begun funneling substantial resources into the sector.

In a parallel development, Israeli innovation authorities awarded VC firms Adir Capital and Sling Capital approximately $33 million in state-backed guarantees. These funds are specifically mandated to drive private investment into next-generation military and dual-use technologies. Several other specialized funds are likewise actively raising capital to capitalize on the defense tech surge. While Protego was already too far along in its proprietary fundraising cycle to participate in the government’s specific tender, the broader proliferation of state-backed and private defense funds highlights a permanent structural shift in how national security innovation is financed.

Looking Ahead: Fund II and US Expansion

Even as Protego celebrates the final close of its debut fund, the firm’s leadership is already laying the groundwork for its next phase of growth. Protego has officially slated the launch of its second fund for the first quarter of 2027.

The upcoming vehicle is expected to feature a broader geographic and operational scope. While Fund I focused heavily on Israeli innovations, Fund II will expand its mandate to include early-growth American defense-tech companies. This cross-border expansion will be bolstered by commitments from domestic Israeli institutional investors alongside a substantial, already-secured anchor commitment from a major U.S. financial institution.

Implications for the Global Venture Capital and Defense Markets

The successful close of Protego Ventures’ $125 million debut fund, paired with the public market debut of portfolio company XTEND, marks a significant maturation point for the defense tech asset class. For decades, traditional venture capital firms maintained strict environmental, social, and governance (ESG) exclusions or general risk aversions that barred investments in military hardware and dual-use intelligence software.

However, escalating geopolitical tensions, the convergence of commercial and military technology (such as artificial intelligence, autonomous robotics, and advanced satellite communications), and proven pathways to liquidity have fundamentally altered institutional appetites. Defense tech is no longer viewed as a fringe sector characterized by slow-moving government contractors, but rather as a high-velocity arena driven by agile software and hardware startups capable of rapid deployment.

As firms like Protego Ventures bridge the gap between battlefield realities and private capital markets, the pipeline from early-stage garage innovation to public exchange listing or military procurement is faster and more fluid than ever before. With Fund II on the horizon and a growing network of international defense partners, Protego and its peers are cementing defense technology as a permanent, high-growth pillar of the global venture capital landscape.