Protego Ventures Closes Debut $125M Defense Tech Fund to Capitalize on Surging Global Security Demand

The intersection of national defense and venture capital has undergone a profound structural transformation over the past several years. Once viewed as an incompatible pairing due to ethical reservations, long procurement cycles, and regulatory hurdles, defense technology has rapidly evolved into one of the most active sectors in the global venture capital ecosystem. PitchBook data indicates that defense tech VC dealmaking achieved historic milestones in the first quarter of 2026, driven by escalating geopolitical tensions, rapid advancements in autonomous systems, and an urgent demand for asymmetric warfare capabilities. Across global financial hubs, newly minted venture capital firms are emerging with mandates focused exclusively on dual-use and military-grade technologies.

Among these specialized investors is Protego Ventures, a two-year-old firm that has positioned itself as the pioneering and largest dedicated defense technology venture capital fund in Israel. Operating under the leadership of co-founders Lital Leshem and Lee Moser, Protego has officially announced the final close of its debut fund, securing $125 million in total capital commitments. The fund’s deployment strategy targets early-stage and growth-stage companies developing advanced systems intended to secure both Israeli borders and the broader global defense apparatus, with individual check sizes ranging from $5 million to $50 million.

The Genesis of Protego Ventures: October 7 and the Post-War Tech Pivot

The founding narrative of Protego Ventures is inextricably linked to the geopolitical shockwaves of October 7, 2023, when Hamas launched unprecedented attacks on southern Israel. In the immediate aftermath of the tragedy, global investment firm Ares Management recognized an urgent strategic imperative: the modernization of Israel’s defense architecture would require immediate, agile private-sector innovation. Ares approached Lital Leshem and Lee Moser, encouraging them to combine their respective expertise in military intelligence, venture capital, and startup operations to build a specialized vehicle capable of rapidly funding critical security technologies.

Ares Management anchored the fledgling fund with a $30 million limited partner commitment, providing Protego with the dry powder necessary to execute transactions immediately upon inception. This institutional backing proved vital in establishing the firm’s credibility within a tightly knit, high-stakes defense ecosystem.

The founders bring formidable, complementary credentials to the table. Lee Moser is a seasoned venture capitalist who maintains her role as a managing partner at the generalist VC firm AnD Ventures, bridging traditional tech investing with specialized defense markets. Lital Leshem brings an insider’s perspective shaped by eleven years of service in the Israeli military and intelligence sectors, complemented by entrepreneurial experience as a co-founder of a security startup that was acquired by Axon for $625 million in 2025.

Leshem’s personal experience on October 7 underscores the gravity of the firm’s mission. Serving as a military reservist while pregnant, she was mobilized on the day of the attacks and remained on active duty until the final weeks of her pregnancy. Witnessing firsthand how modern combat operations diverged from the tactical paradigms of the previous decade provided Leshem with acute insights into the urgent technological gaps facing modern armed forces.

Strategic Portfolio Construction and the "Fund Maker" Strategy

Rather than pursuing an expansive, spray-and-pray investment model, Protego Ventures intentionally capped its debut fund at $125 million—stopping short of its original $150 million target. This calculated decision was heavily influenced by the trajectory of its inaugural portfolio company, XTEND, an advanced developer of human-guided autonomous drone operating systems.

Earlier this month, XTEND achieved a major liquidity milestone by completing its initial public offering on the New York Stock Exchange (NYSE). The successful public debut transformed XTEND into a potential "fund maker"—an industry term for a single investment that generates returns large enough to pay back the entirety of a fund’s capital commitments.

By keeping the fund size compressed, Protego ensured that the extraordinary upside generated by XTEND would not be diluted across an overly expansive pool of capital or a bloated investor base. As Leshem succinctly noted regarding the decision to forgo a larger fund, "Nobody wants to share the pie."

Beyond XTEND, Protego’s portfolio includes high-impact startups such as ASIO, a developer of advanced situational awareness systems that has already established strategic operational partnerships with prominent American defense tech prime Anduril. The firm’s portfolio companies are purposefully selected for their capacity to address immediate battlefield requirements, bridging the gap between cutting-edge software, artificial intelligence, and physical hardware.

Navigating the Military-Industrial Complex and Insider Access

Investing in defense technology requires a delicate balance of regulatory compliance, institutional trust, and deep technical evaluation. For foreign investors or generalist VCs, penetrating the Israeli defense establishment can prove virtually impassable. However, Protego’s leadership team has leveraged their extensive military and technological networks to position the firm as a trusted intermediary between innovators and end-users.

According to Leshem, the reception from military leadership has been overwhelmingly positive. The tactical urgency driving modern armed forces has created an environment where military personnel actively seek out novel solutions, often operating under the radar to engage with venture-backed startups, evaluate emerging software, and participate in joint training exercises to integrate new technologies into active service.

This close-knit synergy between operators and investors has allowed Protego to conduct rigorous technical due diligence, ensuring that portfolio companies are building products tailored to real-world combat constraints rather than theoretical use cases.

The Broader Israeli Defense Tech Boom and State-Backed Competition

Protego Ventures is by no means operating in an isolated vacuum. The strategic imperative of next-generation military technology has prompted a broader awakening across the Israeli financial and governmental sectors. Recognizing the vital role of private capital in maintaining technological superiority, Israeli authorities have increasingly stepped in to catalyze investment in dual-use and defense technologies.

In recent policy initiatives, Israeli state-backed programs awarded substantial financial guarantees—including approximately $33 million distributed to venture capital firms Adir Capital and Sling Capital—to drive investment in military innovations. Concurrently, a wave of new regional funds has emerged to capitalize on the defense tech supercycle. While Protego was too advanced in its private fundraising cycle to participate in the government’s specific state-backed tenders, the proliferation of specialized funds validates the foundational thesis upon which Protego was built.

Despite impending competition from newly capitalized peers, Protego’s early market entry, established network, and proven liquidity events provide the firm with a formidable competitive moat.

Looking Ahead: Fund II and Cross-Border Expansion

With its debut vehicle fully deployed and validated by successful public listings, Protego Ventures is already mapping out its next phase of institutional growth. The firm is actively planning the launch of its second fund, slated for the first quarter of 2027.

The upcoming fund will feature an expanded geographic and operational mandate. While maintaining its core focus on Israeli innovation, the second vehicle will incorporate early-growth American defense tech companies into its deployment scope. Leshem has confirmed that the firm has already secured a major anchor commitment from a large U.S. institutional investor, complemented by commitments from established Israeli financial institutions.

Implications for the Global Venture Ecosystem

The rapid maturation of Protego Ventures and the broader defense tech sector signals a permanent shift in institutional attitudes toward military investment. For decades, environmental, social, and governance (ESG) frameworks and traditional venture capital mandates systematically restricted capital allocation toward defense and dual-use technologies.

However, escalating geopolitical instability across the Middle East, Eastern Europe, and the Indo-Pacific has forced a pragmatic realignment among institutional investors. Pension funds, endowments, and sovereign wealth funds increasingly recognize that national security technology is not only a moral and strategic necessity for democratic stability, but also a highly lucrative asset class capable of generating outsized venture returns.

As Protego prepares to deploy its next wave of capital across Israeli and American markets, the firm stands at the vanguard of a new era where venture capital and national defense operate in tandem to shape the future of global security.