Protego Ventures Closes $125M Debut Fund for Israeli Defense Tech

Protego Ventures has completed the final close of its debut fund with $125 million in capital commitments, according to TechCrunch. The two-year-old firm, which presents itself as the first and largest dedicated defense tech venture capital fund in Israel, deliberately stopped short of its $150 million target.

The reason lies in its first portfolio company. Drone maker XTEND went public on the New York Stock Exchange earlier this month and now looks like a potential "fund maker" — a single investment capable of returning the entire fund. A smaller fund magnifies the impact of one big win on overall returns, and raising more capital would only dilute that upside across a larger pool of investors. "Nobody wants to share the pie," said Lital Leshem, who co-leads Protego with Lee Moser.

The $125 million vehicle allows Protego to invest between $5 million and $15 million per company, focusing on startups "addressing the critical defense and security needs of Israel and the global community," according to the firm's website. Beyond XTEND, the portfolio includes ASIO, a situational awareness startup that has partnered with Anduril.

Ares Management anchors the fund. Leshem said the investment firm suggested she and Moser join forces and launch Protego after the October 7, 2023 Hamas attack on Israel, convinced that new technologies would be critical to strengthening the country's defense against new threats. Ares committed $30 million as a limited partner, giving Protego the capital to start investing immediately.

Both founders bring insider credentials to a market that rewards them. Moser, a seasoned venture capitalist, will remain a managing partner at the generalist firm AnD Ventures. Leshem co-founded a startup that was acquired in 2025 for $625 million and spent 11 years in the military and intelligence field.

October 7 reshaped her view of the battlefield. "Everything changed on October 7," Leshem told TechCrunch. Deployed as a reservist while pregnant on the day of the attacks, she said: "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."

The firm reports strong reception within defense circles. "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 said.

Protego's closing comes amid a record quarter for the sector. Defense tech venture dealmaking set a record in Q1 2026, per PitchBook, and new VC firms have emerged worldwide to invest solely in defense startups.

Competition in Israel is building. Israeli authorities awarded VC firms Adir Capital and Sling Capital roughly $33 million in state guarantees to invest in military and dual-use technologies, and other funds are raising capital for similar bets. Leshem said Protego was too far along in its own fundraising to participate in the government's tender.

Protego is already planning its next move: a second fund in the first quarter of 2027, backed by Israeli institutional investors and one large U.S. commitment Leshem says she has already secured. That fund will have a broader scope, including early-growth American defense-tech companies.