Defense and venture capital used to rarely overlap, but that’s no longer the case. Defense tech VC dealmaking set a record in Q1 2026, and new VC firms have emerged around the world to invest solely in defense startups.
Key Takeaways
- Protego Ventures, an Israeli defense tech VC founded and led by two prominent women, has successfully closed its debut fund at $125 million, signaling a significant shift in the traditionally male-dominated defense and venture capital sectors.
- The firm’s strategic decision to halt fundraising below its initial target, influenced by an early “fund maker” success (XTEND’s IPO), underscores a unique, performance-driven approach to maximizing investor returns in a volatile market.
- Born from the urgent imperative following geopolitical shifts, Protego leverages its founders’ deep military intelligence and seasoned VC expertise, with ambitious plans for rapid expansion into the American defense-tech market with a second fund.
Protego Ventures Secures $125M Debut Fund, Forging a New Path in Defense Tech
The intersection of defense and venture capital, once a rare occurrence, has rapidly transformed into one of the most dynamic sectors in the global tech landscape. Q1 2026 alone witnessed record-breaking defense tech VC dealmaking, prompting the emergence of specialized firms worldwide dedicated solely to fueling innovation in this critical domain. Among these pioneering entities is Protego Ventures, a two-year-old Israeli firm making waves not only for its strategic focus but also for its distinctive leadership.
Protego Ventures, positioning itself as Israel’s first and largest dedicated defense tech VC, has just announced the final close of its inaugural fund, securing an impressive $125 million in capital commitments. This exclusive reveal to TechCrunch highlights a significant milestone for the firm, notably led by two formidable women: Lital Leshem and Lee Moser. Their success in navigating the complex worlds of venture capital and national security underscores a powerful narrative of expertise, resilience, and vision.
Strategic Funding and a “Fund Maker” Success Story
The $125 million fund size empowers Protego to make substantial investments, targeting between $5 million and $15 million per company. This strategic allocation allows the firm to take meaningful stakes in startups that are “addressing the critical defense and security needs of Israel and the global community,” as outlined on its website. The focus is clear: identify and nurture technologies that offer tangible advancements in national and international security capabilities.
A compelling element of Protego’s fundraising journey is its decision to conclude at $125 million, falling short of its initial $150 million target. This calculated move was largely influenced by the stellar performance of its first portfolio company, XTEND, a drone maker that recently went public on the NYSE. XTEND’s early success has positioned it as a potential “fund maker”—an investment capable of returning the entire fund on its own. As Leshem succinctly put it, “Nobody wants to share the pie.” By capping the fund at $125 million, Protego strategically magnified the potential impact of XTEND’s success on overall returns, ensuring a more concentrated upside for its limited partners.
The Genesis: Born from Necessity and Backed by Giants
The very inception of Protego Ventures is deeply rooted in geopolitical realities. Ares Management, a global investment firm and now one of Protego’s biggest backers, played a pivotal role. Following the October 7, 2023, Hamas attack on Israel, Ares Management approached Leshem and Moser, suggesting they join forces to establish Protego. The conviction was clear: new technologies would be indispensable in bolstering Israel’s defense capabilities and addressing the evolving landscape of modern threats. This strategic foresight from Ares, coupled with a $30 million investment as a limited partner, provided Protego with the crucial initial capital to commence operations and begin investing without delay.
Beyond XTEND, Protego’s burgeoning portfolio includes other promising startups, such as ASIO. ASIO specializes in developing advanced situational awareness systems, a technology critical for real-time intelligence and operational responsiveness in complex environments. Its partnership with defense giant Anduril further validates the potential and innovative edge that Protego seeks in its investments, demonstrating a clear path from early-stage development to strategic industry integration.
Navigating the Terrain: Expertise, Networks, and Strong Reception
The unique backgrounds of Protego’s founders are undeniably a cornerstone of its early success. Lee Moser brings a wealth of experience as a seasoned venture capitalist, continuing to serve as a managing partner at the generalist VC firm AnD Ventures. Her deep understanding of investment strategies, market dynamics, and startup growth is invaluable. Lital Leshem complements this with an equally impressive and distinct pedigree. Co-founder of a startup acquired for $625 million in 2025, Leshem also boasts 11 years of experience in the military and intelligence fields. This dual perspective—a blend of high-tech entrepreneurial success and profound national security insight—provides Protego with an unparalleled advantage.
Navigating the Israeli defense market, known for its intricate networks and specific protocols, is significantly eased by the founders’ insider status. Their extensive connections within both the defense establishment and the tech ecosystem allow Protego to access proprietary deal flow and forge crucial partnerships. Leshem attests to the strong reception from defense circles: “On the military side, there is a lot of respect, and people are coming — even under the radar — to talk to us, to learn from us, to train with us, and for sure get our technology and innovation.” This indicates a deep-seated trust and recognition of their expertise, opening doors that might remain closed to less specialized or connected firms.
The Catalyst of October 7 and Future Horizons
The events of October 7, 2023, served as a profound personal and professional catalyst for Leshem. Deployed as a reservist while pregnant on the day of the attacks, she recounts, “Everything changed on October 7. And basically until the delivery room, I was there, witnessing and getting the first-row seat to how the battlefield acted differently from what I knew in the past decade.” This visceral, first-hand experience profoundly shaped her understanding of contemporary warfare and reinforced the urgent need for agile, technologically advanced defense solutions—a mission that now lies at the heart of Protego Ventures.
Protego will not, however, have this critical field to itself indefinitely. The Israeli authorities have recognized the same paradigm shift, actively supporting the defense tech ecosystem. The government has awarded VC firms Adir Capital and Sling Capital approximately $33 million in state guarantees to invest in military and dual-use technologies, with other funds also aggressively raising capital for similar ventures. While Protego was too far along in its own fundraising to participate in this specific government tender, the increasing state support underscores the broader, national recognition of defense tech as a strategic imperative.
Looking ahead, Protego is already laying the groundwork for its next significant move. A second fund is planned for the first quarter of 2027, with an even more ambitious and expansive scope. This follow-up fund will aim to attract further backing from Israeli institutional investors, in addition to a significant U.S. commitment that Leshem has already secured. Crucially, Fund II will broaden its investment focus to include early-growth American defense-tech companies, signaling Protego’s ambition to become a transatlantic leader in this vital sector. This expansion reflects a confident outlook on the continued growth of defense innovation and a strategic move to leverage cross-border synergies in security technology.
This story was updated to correct the amount Protego will invest in companies.
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Bottom Line
Protego Ventures stands as a compelling testament to the evolving landscape of defense investment, demonstrating how strategic vision, unparalleled expertise, and timely geopolitical catalysts can converge to create a powerful force for innovation. Led by two women navigating a traditionally male-dominated sector, the firm’s successful $125 million debut fund, underscored by an early “fund maker” success, positions it at the forefront of addressing critical global security needs. With ambitious plans for a second fund and expansion into the U.S. market, Protego is not just investing in defense tech; it is actively shaping the future of national security through agile, cutting-edge solutions, proving that the most impactful defense innovations often emerge from unexpected places.
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