Protego Ventures Closes $125M Debut Fund to Back Israeli Defense Tech

Protego Ventures has closed its debut venture fund with $125 million in capital commitments, creating one of Israel's dedicated investment vehicles focused specifically on defense technology.

The two-year-old venture firm, led by managing partners Lital Leshem and Lee Moser, plans to invest between $5 million and $15 million in individual companies developing technologies aimed at defense and security needs in Israel and globally.

Protego had initially targeted $150 million for the fund but ultimately closed at $125 million. According to Leshem, the decision was partly influenced by the performance potential of the firm's existing portfolio, particularly drone technology company XTEND, which became a publicly listed company on the NYSE earlier in September 2026.

The firm is now preparing for a second fund that is expected to launch in the first quarter of 2027, with plans to broaden its scope to include early-growth defense technology companies in the United States.

Building a dedicated defense technology fund

Protego Ventures was founded approximately two years ago at a time when defense technology was attracting increasing attention from venture investors.

The firm's strategy is centered on Israeli startups developing technologies for defense and security applications.

Its website describes the fund's focus as companies addressing critical defense and security needs in Israel and the global community.

With $125 million committed to the first fund, Protego can make investments ranging from $5 million to $15 million per company.

That gives the firm the ability to participate meaningfully in early-stage defense technology businesses while maintaining a concentrated portfolio.

Protego's approach also reflects a broader shift in venture capital. Defense technology was historically a specialized area with relatively limited overlap between traditional venture investing and military applications. More recently, startups working on drones, autonomous systems, battlefield intelligence and dual-use technologies have attracted significant venture interest.

XTEND provides an early portfolio milestone

XTEND was Protego's first portfolio company and has become an important part of the firm's story.

The drone technology company went public on the New York Stock Exchange earlier in September 2026.

For Protego, the investment illustrates the type of outcome that can have a significant effect on a relatively concentrated venture fund.

Leshem said Protego deliberately stopped fundraising at $125 million rather than reaching its original $150 million target.

Her explanation was that a smaller fund can increase the impact of a major portfolio success on the overall fund. If an investment such as XTEND ultimately generates returns large enough to materially affect the entire fund, raising additional capital would mean those returns are distributed across a larger pool of investors.

The firm therefore chose to retain a smaller fund size rather than maximize the amount of capital under management.

Backing from Ares executives

Executives from Ares Management are among Protego's major backers.

According to Leshem, the Ares executives encouraged her and Moser to establish Protego following the October 7, 2023 Hamas attack on Israel.

The idea was based on the view that emerging technologies could play an important role in strengthening defense capabilities as the security environment changed.

The Ares executives provided $30 million as limited partners, giving Protego the financial support required to begin investing quickly.

The firm subsequently built a portfolio that includes XTEND and ASIO.

ASIO develops situational awareness systems and has partnered with Anduril.

Leadership combines venture and defense experience

Protego's leadership combines venture capital experience with backgrounds in military and intelligence.

Lee Moser is an experienced venture investor and continues to serve as a managing partner at generalist venture firm AnD Ventures.

Lital Leshem brings more than a decade of experience in the military and intelligence sector.

She also co-founded a startup that was acquired by Axon for $625 million in 2025.

Leshem was deployed as a military reservist during the October 7 attacks and has described the experience as a major influence on her decision to focus on defense technology.

Her experience in military and intelligence environments gives Protego direct familiarity with the operational requirements of defense organizations.

That perspective is particularly relevant in a sector where technical performance, deployment conditions and relationships with military organizations can be as important as traditional startup metrics.

Israel's defense tech ecosystem is expanding

Protego is entering a growing Israeli defense technology investment market.

The Israeli government has also begun supporting venture investment in military and dual-use technologies.

Israeli authorities awarded venture firms Adir Capital and Sling Capital approximately $33 million in state guarantees to support investments in next-generation defense technology.

Other funds are also raising capital around defense and dual-use technologies.

Protego did not participate in that government-backed program because its own fundraising process was already too advanced, according to Leshem.

The emergence of multiple specialized funds reflects the increasing amount of capital entering the Israeli defense technology ecosystem.

An insider network is part of the strategy

Protego's founders are also relying on established relationships within Israel's defense and technology sectors.

Moser's venture capital background provides access to the broader startup ecosystem, while Leshem's military and intelligence experience provides familiarity with defense organizations and their requirements.

Leshem said Protego has received strong interest from people within the defense community.

The firm's positioning is therefore based not only on providing capital but also on connecting startups with the organizations and people that can help develop and deploy their technologies.

For defense startups, that type of access can be important because selling to military organizations can involve lengthy procurement processes, specialized testing and operational validation.

Preparing a second fund

Protego is already planning its next fund.

The firm expects to begin raising its second vehicle in the first quarter of 2027.

The next fund is expected to have a broader geographic scope, including early-growth defense technology companies in the United States.

Leshem said the second fund already has commitments planned from Israeli institutional investors and one large U.S. investor.

This would expand Protego beyond its initial focus on Israeli companies and allow the firm to participate in the wider global defense technology ecosystem.

The move comes as defense startups increasingly operate across national markets, with technologies developed in one country being adopted or adapted for customers and military organizations elsewhere.

A growing venture market for defense technology

Protego's $125 million debut fund comes during a broader expansion of defense technology venture capital.

The source notes that defense tech venture dealmaking reached a record level in the first quarter of 2026.

That activity has encouraged the formation of specialized funds focused on defense and dual-use technologies.

For Protego, the opportunity is particularly connected to Israel's established defense technology ecosystem and the country's startup base.

The firm is now positioned to invest significant amounts into companies developing technologies that address defense and security requirements.

Its portfolio already includes a publicly listed drone company and a situational awareness technology company, while the new fund gives Protego capital to build out its portfolio further.

From $125M debut fund to a broader strategy

Protego Ventures' debut fund gives the firm $125 million to invest in Israeli defense technology startups, with individual investments ranging from $5 million to $15 million.

Its leadership combines venture capital and defense experience, while its investor base includes executives from Ares Management who committed $30 million as limited partners.

The firm's first portfolio company, XTEND, has already reached the public markets, while ASIO represents another example of the technologies Protego is backing.

The firm is now preparing for its next phase.

A second fund planned for early 2027 could expand the strategy to early-growth U.S. defense technology companies, giving Protego a broader role in the rapidly developing global defense tech investment ecosystem.