By Global Defense & Venture Capital Correspondent
Published exclusively via industry reports
Main Facts: A New Frontier in Defense Venture Capital
The historical divide between the defense sector and traditional venture capital has officially dissolved. As global geopolitical tensions reach new highs, defense technology venture capital dealmaking shattered historical benchmarks in the first quarter of 2026. Around the world, a new wave of specialized venture capital firms has emerged, dedicated exclusively to backing early- and growth-stage defense startups.
Among the vanguard of this movement is Protego Ventures. Founded just two years ago and proudly positioned as Israel’s first and largest dedicated defense tech venture capital firm, Protego has officially completed the final close of its debut fund, securing $125 million in capital commitments.
Led by co-founders Lital Leshem and Lee Moser—two prominent figures bridging the worlds of elite military intelligence, startup exits, and venture finance—Protego is designed to write checks ranging from $5 million to $50 million per company. The firm’s mandate is clear: to identify, fund, and scale innovative startups that address the critical defense and security needs of both Israel and the global allied community.
Rather than chasing an inflated headline figure, Protego intentionally capped its fund below its initial $150 million target. The reasoning is rooted in venture math and portfolio strategy. By maintaining a leaner fund size, the impact of a single massive "fund maker"—an investment capable of single-handedly returning the entire fund—is magnified. With Protego’s very first portfolio company, drone maker XTEND, recently going public on the New York Stock Exchange (NYSE) earlier this month, the firm recognized that raising a larger pool of capital would only dilute the massive upside for its core backers.
"Nobody wants to share the pie," co-founder Lital Leshem noted.
Chronology: From the October 7 Catalyst to NYSE Success
To understand how Protego Ventures materialized into a $125 million powerhouse in just two years, one must examine the timeline of modern geopolitical shocks and entrepreneurial resilience.
The Catalyst: October 7, 2023
The inception of Protego is inextricably linked to a defining moment in modern history. In the immediate aftermath of the October 7, 2023, Hamas attacks on Israel, global investment giant Ares Management recognized a profound operational shift. Ares approached Lital Leshem and Lee Moser with a conviction: modern warfare and national survival would henceforth rely entirely on agile, next-generation technology. They urged the two leaders to join forces and establish a dedicated vehicle to fortify Israel’s defense capabilities.
Ares provided a decisive vote of confidence by anchoring the fund with a $30 million limited partner (LP) commitment, giving Protego the immediate firepower needed to deploy capital without delay.
Deployment and Early Wins (2024–2025)
Armed with capital and deep sector expertise, Protego moved quickly.
- XTEND: The firm’s inaugural portfolio company, a cutting-edge drone operating system developer, made headlines by successfully going public on the NYSE in early 2026.
- ASIO: Another key portfolio standout, ASIO specializes in advanced situational awareness systems and has already secured high-profile strategic partnerships with American defense tech titan Anduril.
The Final Close and Public Markets (Q1 2026)
By the first quarter of 2026, defense tech VC dealmaking hit an all-time high globally. Amidst this backdrop, Protego finalized its $125 million debut fund, capitalizing on the momentum of XTEND’s public market debut.
Looking forward, the firm has already mapped out its next major chapter: launching Fund II in the first quarter of 2027. This upcoming vehicle will feature a broader scope, targeting early-growth American defense tech companies alongside Israeli innovations, backed by local institutional heavyweights and a major U.S. commitment already secured by Leshem.
Supporting Data & Market Dynamics
The rise of Protego Ventures does not happen in a vacuum. It is part of a massive macroeconomic and geopolitical realignment between private capital and military necessity.
- Record-Breaking Dealmaking: According to PitchBook’s Q1 2026 defense tech trends report, venture investments in military, aerospace, and dual-use technologies have reached unprecedented levels, outperforming many traditional software and consumer tech sectors.
- The $125M Deployment Strategy: Protego’s ticket size ($5M to $50M) bridges the historical "valley of death" that early-stage defense hardware and software startups often face when trying to scale past prototype phases into mass military adoption.
- Government Intervention: Israeli authorities have taken note of the private sector’s pivot toward national security. State-backed initiatives have recently awarded firms like Adir Capital and Sling Capital approximately $33 million in state guarantees to spur investment in next-generation military and dual-use technologies, with several other regional funds currently raising parallel vehicles. (Note: Protego was operating too far along in its own independent fundraising cycle to participate in the government tender).
- Exits and Valuations: Lital Leshem brings invaluable market validation to Protego. Prior to co-founding the firm, she co-founded a startup that was acquired by Axon for a staggering $625 million in 2025, proving her capacity to identify and scale venture-backable assets to massive liquidity events.
Official Responses & Leadership Perspectives
The success of Protego Ventures is heavily attributed to the unique backgrounds of its founding partners, who combine frontline military experience with top-tier venture capital acumen.
Lital Leshem’s Frontline Perspective:
Leshem’s journey to venture capital is visceral. On October 7, 2023, she was deployed as a military reservist—while pregnant. She served on active duty through her pregnancy up until her delivery room admission.
"Everything changed on October 7," Leshem shared in an interview. "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, firsthand knowledge of modern warfare has earned Protego rare credibility within military and defense circles. According to Leshem, the military establishment has welcomed private innovation with open arms:
"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."
Navigating the Insider Ecosystem:
Navigating the Israeli defense tech market requires deep institutional trust and insider networks, which Protego’s leadership possesses in abundance.
- Lee Moser brings seasoned venture capital expertise to the table, maintaining her role as a managing partner at the generalist VC firm AnD Ventures.
- Lital Leshem marries her startup exit experience with 11 years of high-level service in the Israeli military and intelligence sectors.
By leaning into these overlapping networks, Protego has bypassed the traditional friction that outsiders face when trying to sell dual-use tech to defense procurement agencies.
Implications: The Future of Defense Tech and Venture Capital
The emergence and successful capitalization of Protego Ventures signals several critical paradigm shifts for the global venture capital and defense landscapes:
- The Normalization of Defense VC: Once shunned by institutional limited partners due to ESG constraints or ethical mandates, defense technology has rapidly transitioned into an asset class viewed as essential for geopolitical stability and democratic preservation. Institutional investors are no longer hesitant to back military applications.
- The "Fund Maker" Phenom in Hardware: Protego’s decision to cap its fund size at $125 million rather than scaling to $500 million or $1 billion highlights a strategic truth about deep tech and defense: hard-tech companies require concentrated capital deployment where individual exits (like XTEND going public on the NYSE) can return an entire vehicle. This model protects LP returns from dilution and encourages higher-conviction backing.
- Cross-Border Defense Alliances: With Protego’s planned expansion into the U.S. market via Fund II in 2027, the barrier between Israeli defense innovation and American military procurement is shrinking. Dual-use technologies developed in Tel Aviv are increasingly finding integration paths within the U.S. defense apparatus through partnerships with firms like Anduril.
- State-Private Synergy: As governments worldwide begin offering financial backstops, tax incentives, and state guarantees for defense-focused VC funds, public-private partnerships are becoming the primary engine for military modernization.
As geopolitical flashpoints continue to evolve, firms like Protego Ventures are proving that agile private capital, guided by leaders with real battlefield experience, can move faster and more decisively than legacy defense contractors—permanently altering how the world builds and funds its security infrastructure.
