Protego Ventures closes $125M debut fund for Israeli defense tech

Defense and venture capital used to rarely overlap, but that’s changed: defense tech VC dealmaking set a record in the first quarter of 2026, and new firms have emerged around the world to invest solely in defense startups. Protego Ventures, which presents itself as the first and largest dedicated defense tech VC in Israel, is one of them. Led by Lital Leshem and Lee Moser, the firm has completed the final close of its debut fund with $125 million in capital commitments, TechCrunch learned.

The fund size lets Protego invest between $5 million and $15 million per company, with a focus on startups addressing what the firm’s website describes as the critical defense and security needs of Israel and the global community. Its portfolio includes drone maker XTEND, its first investment, which went public on the NYSE earlier this month, and ASIO, a situational-awareness startup that has partnered with Anduril.

Protego stopped short of its $150 million target on purpose: a smaller fund magnifies the impact of a single big win on overall returns, and with XTEND now looking like a potential fund-maker, raising more capital would only dilute that upside among a larger pool of investors, Leshem said.

Ares Management is one of Protego’s biggest backers, with a $30 million investment as a limited partner. Ares suggested that Leshem and Moser join forces and start the firm in the aftermath of the October 7, 2023, Hamas attack on Israel, convinced that new technologies would be key to strengthening Israel’s defenses against new threats, Leshem said. She said the reception in defense circles has been strong, with people coming, even under the radar, to learn from the firm and access its technology and network.

Leshem brings 11 years of experience in the military and intelligence field, plus the experience of co-founding a startup that was acquired for $625 million in 2025. She said she was deployed as a reservist while pregnant on the day of the October 7 attacks. Moser, a seasoned venture capitalist, will remain a managing partner at the generalist VC firm AnD Ventures.

Protego won’t have the field to itself for long. Israeli authorities have taken notice of the same shift, awarding VC firms Adir Capital and Sling Capital about $33 million in state guarantees to invest in military and dual-use technologies, with other funds also 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 is already planning a second fund for the first quarter of 2027, backed by Israeli institutional investors and one large U.S. commitment Leshem said she has already secured, with a broader scope that includes early-growth American defense-tech companies.

Why it matters

A dedicated Israeli defense tech fund posting a record-setting sector and adding a U.S.-focused follow-up fund signals that defense-tech capital is becoming a distinct, cross-border asset class rather than a niche carve-out of generalist VC.