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, making the two-year-old firm what it presents as the first and largest dedicated defense tech venture capital fund in Israel, TechCrunch learned exclusively.

The fund size lets Protego invest between $5 million and $50 million per company, focused on startups "addressing the critical defense and security needs of Israel and the global community," according to its website. The close comes as defense tech VC dealmaking set a record in Q1 2026, and new firms have emerged worldwide to invest solely in defense startups — a space where defense and venture capital used to rarely overlap.

Protego is led by two women, Lital Leshem and Lee Moser. Ares Management, one of the firm's biggest backers, suggested the two join forces and start Protego in the aftermath of the October 7, 2023, Hamas attack on Israel, with the conviction that new technologies would be key to boosting Israel's defense capabilities against new threats, Leshem said. Ares committed $30 million as a limited partner, giving Protego the support it needed to start investing right away.

Why $125 million, not $150 million

The firm stopped short of its $150 million target for a strategic reason: a smaller fund magnifies the impact of a single big win on overall returns. Protego's first portfolio company, drone maker XTEND, went public on the NYSE earlier this month and now looks like a potential "fund maker" — a single investment capable of returning the whole fund. Raising more capital would only dilute that upside among a larger pool of investors. "Nobody wants to share the pie," Leshem said.

Beyond XTEND, the portfolio includes ASIO, which develops situational awareness systems and has partnered with Anduril.

Leshem says the reception in defense circles has been strong. "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."

Insider networks and a front-row seat

The Israeli market is easier to navigate for insiders, and the two founders are leaning into their networks. Moser, a seasoned venture capitalist, will remain a managing partner at the generalist VC firm AnD Ventures. Leshem co-founded a startup that was acquired for $625 million in 2025 and brings 11 years of experience in the military and intelligence field.

"Everything changed on October 7," Leshem told TechCrunch. She was deployed, while pregnant, as a reservist on the day of the attacks. "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."

Competition is coming

Protego won't have the field to itself for long. Israeli authorities have awarded VC firms Adir Capital and Sling Capital about $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 take part in the government's tender.

Protego, meanwhile, 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 has already secured. The new fund will have a broader scope that includes early-growth American defense-tech companies — positioning Protego to compete on both sides of the Atlantic as the sector's funding boom accelerates.