Protego Ventures Closes $125M Fund I for Early-Growth Israeli Defense Tech

Protego Ventures has closed its first fund at $125 million, creating what the firm calls Israel's first dedicated venture vehicle focused on early-growth defense technology companies. The announcement coincides with the fund's first portfolio company, XTEND, completing its initial public offering on the New York Stock Exchange at a $1.5 billion valuation.

Protego was founded by Lital Leshem and Lee Moser, both veterans of Israel's defense and intelligence ecosystem. The firm targets Israeli companies that have already demonstrated operational performance and now need capital plus access to international defense markets. The partners designed the fund to close a gap between surging global defense-tech investment and Israeli firms whose technologies are already validated in active operational environments.

The macro backdrop is unusually favorable. Global defense spending has risen 50% over the past decade, according to industry data cited by the firm. Venture investment in defense technology reached $19.8 billion in the first quarter of 2026 alone, driven by heightened geopolitical tensions and demand for systems that can be deployed immediately. Protego argues this environment rewards companies that have already moved from development to deployment within the Israel Defense Forces and allied militaries.

"Protego was built on the conviction that many of the best defense companies in the world are being built right now, in Israel, under real operational demands, iterating according to real frontline conditions, for real customers," said Lital Leshem, Co-founder and Managing Partner. "That feedback loop produces technologies that are faster, leaner, scalable and more flexible than almost anything developed through traditional procurement channels. The free world is defending itself, and smart capital is following."

What sits in the Fund I portfolio?

XTEND, which develops autonomous robotic platforms, anchors the portfolio. It operates within the IDF, the US Department of Defense, SOCOM, and multiple allied forces. Protego led the company's $70 million Series B round before the public listing.

The rest of Fund I spans four technology areas:

• ASIO Technologies — autonomy and resilient navigation, with systems integrated onto platforms built by global defense giants.
• Prisma Photonics — large-scale sensing networks built on existing fiber-optic infrastructure for critical infrastructure monitoring.
• Rilian — AI systems for mission-controlled environments, built with practitioner-level operational expertise.
• XTEND — autonomous robotic platforms, now publicly traded.

Why did founders struggle to raise capital?

Protego says the founders it backed repeatedly hit the same wall: generalist venture firms did not understand defense procurement, while defense-focused investors lacked experience in Israel's security ecosystem. The firm positions itself as the bridge between those two investor camps.

"What we kept hearing from founders was that generalist investors didn't understand their business, and defense-focused investors didn't understand the Israeli security ecosystem," said Co-founder Lee Moser. "There was real capital flowing into defense globally, but it wasn't reaching the companies that deserved it most – the ones that had already proven their technology under the toughest operational conditions, with genuine customers, in some of the most demanding arenas in the world. We built Protego to bridge that gap, and the close of Fund I combined with our portfolio companies' tremendous achievements in just a short period of time demonstrates that this combination is exactly what the market needed."

What comes next?

Protego is already preparing Fund II, which will expand the firm's investment activity into the United States. The partners point to ongoing procurement reform, increased R&D budgets, and sustained geopolitical demand as conditions mirroring those that enabled Israel's early-growth defense sector in the first place.

The firm also maintains partnerships with major defense organizations, including Elbit Systems, Israel Aerospace Industries, Lockheed Martin, and US Army Futures Command. If XTEND's $1.5 billion NYSE debut sets the template, Fund II's US push will test whether Israeli-built, battlefield-proven defense tech can scale through American procurement channels at speed.