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. One of these is two-year-old Protego Ventures, which presents itself as the first and largest dedicated defense tech VC 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. This fund size is enabling Protego to invest between $5 million and $50 million per company, with a focus on startups addressing the critical defense and security needs of Israel and the global community. These include the likes of drone maker XTEND, its first portfolio company, which went public on the NYSE earlier this month.

That's also why Protego stopped short of its $150 million target: a smaller fund magnifies the impact of a single big win on overall returns, and with XTEND now looking like a potential fund maker, raising more capital would only dilute that upside among a larger pool of investors. Ares Management is one of Protego's biggest backers, suggesting Leshem and Moser join forces and start Protego in the aftermath of the October 7, 2023, Hamas attack, with the conviction that new technologies would be key to boosting Israel's defense capabilities. With a $30 million investment as a limited partner, Ares gave Protego the support it needed to start investing right away.

Besides XTEND, its portfolio also includes startups such as ASIO, which develops situational awareness systems and has partnered with Anduril. Protego won't have the field to itself for long, as Israeli authorities have awarded other VC firms state guarantees to invest in military technologies. Meanwhile, Protego is already planning its next move: a second fund in the first quarter of 2027, backed by Israeli institutional investors and one large U.S. commitment.