Defense tech venture capital dealmaking reached record heights in the first quarter of 2026, marking a dramatic shift in an asset class that once kept its distance from military applications.
At the center of this movement is Protego Ventures, Israel’s first and largest dedicated defense tech venture capital firm, which has finalized the close of its debut fund with $125 million in capital commitments.
Led by Lital Leshem and Lee Moser, the two-year-old firm targets investments between $5 million and $50 million per company. The fund focuses on startups developing critical defense and security solutions for Israel and international markets.
Protego chose to complete the fund below its initial $150 million target to maximize investor upside following the public listing of its initial portfolio company, drone maker XTEND, on the New York Stock Exchange earlier this month.
The early liquidity event positions XTEND as a potential “fund maker”—an investment capable of returning the entire fund value on its own—making further capital raises dilutive to existing partners.
“Nobody wants to share the pie,” Leshem said regarding the decision to cap the fund size.
The firm originated in the aftermath of the October 7, 2023, attacks on Israel, driven by an initial $30 million investment commitment from global asset manager Ares Management. Ares encouraged Leshem and Moser to join forces based on the conviction that next-generation technology would prove vital to counter emerging national security threats.
The founders bring distinct military and venture capital backgrounds to the firm:
- Lital Leshem brings 11 years of military and intelligence experience and previously co-founded a startup that achieved a $625 million acquisition in 2025.
- Lee Moser is an experienced venture capitalist who maintains her role as managing partner at the generalist VC firm AnD Ventures.
Leshem was deployed as a military reservist on the day of the 2023 attacks while pregnant.
“Everything changed on October 7,” Leshem said. “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.”
That operational insight has accelerated Protego’s integration into international defense networks.
“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,” Leshem said.
Beyond XTEND, Protego’s early portfolio includes situational awareness system developer ASIO, which maintains a partnership with defense technology contractor Anduril.
Protego’s capital raise comes amid expanding state support for the sector. Israeli authorities recently awarded roughly $33 million in state guarantees to venture firms Adir Capital and Sling Capital to invest in military and dual-use technologies. Protego bypassed the government tender due to its advanced fundraising stage.
Looking ahead, Protego plans to launch a second fund in the first quarter of 2027. The upcoming fund has already secured commitments from Israeli institutional investors and a major U.S. backer, with plans to expand its investment remit to early-growth American defense tech companies.
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