Defense and venture capital rarely overlapped, but that’s no longer the case. Defense Technology Venture Capital Trading set a record in the first quarter of 2026and new venture capital firms have emerged around the world to invest solely in defense startups.
One of them is two years old. Protego Ventureswhich presents itself as the first and largest VC dedicated to defense technology in Israel. Led notably by two women, Lital Leshem and Lee Moser, it has just completed the final close of its debut fund with $125 million in capital commitments, TechCrunch has learned exclusively.
This fund size allows Protego to invest between $5 million and $50 million per company, focusing on startups that “address the critical defense and security needs of Israel and the global community,” according to its website.
These include companies such as drone manufacturer XTEND, its first portfolio company, which went public on the New York Stock Exchange earlier this month. That’s also why Protego fell short of its $150 million target: a smaller fund magnifies the impact of a single big gain on overall returns, and now that XTEND looks like a potential “fund builder” (a single investment capable of returning the entire fund), raising more capital would only dilute that advantage among a larger group of investors. “Nobody wants to share the pie,” Leshem said.
Ares Management is one of Protego’s largest sponsors. The investment firm suggested that Leshem and Moser join forces and start Protego after the Hamas attack on Israel on October 7, 2023, with the belief that new technologies would be key to boosting Israel’s defense capabilities against new threats, Leshem said.
With a $30 million investment as a limited partner, Ares gave Protego the support it needed to begin investing immediately, Leshem said. In addition to XTEND, its portfolio also includes startups such as ASIO, which develops situational awareness systems and has associated with anduril.
Leshem says the reception in advocacy circles has been strong. “In the military, there is a lot of respect and people come, even undetected, to talk to us, learn from us, train with us and certainly get our technology and innovation.”
Still, the Israeli market is easier to navigate for insiders, and Protego’s two founders are leaning into their networks. Moser, an experienced venture capitalist, will remain managing partner of the generalist venture capital firm. and companies. As for Leshem, who co-founded a startup that was acquired for 625 million dollars In 2025, he will also bring 11 years of experience in the military and intelligence field to his focus.
“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 taking a front row seat to see how the battlefield acted differently than what I had known in the last decade.”
Protego will not have the field alone for long. The Israeli authorities have noticed the same change and have granted the venture capital firms Adir Capital and Sling Capital around $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 advanced in its own fundraising to participate in the government tender.)
Meanwhile, Protego is already planning its next move: a second fund in the first quarter of 2027, backed by Israeli institutional investors and a large US commitment that Leshem has already secured, with a broader scope that includes early-growth US defense technology companies.
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