Israeli Defense-Focused VC Protego Reaches Final Close at $125 Million

Protego Ventures, a startup investor that concentrates on military and security technology, has closed its first fund at $125 million, the firm confirmed. Founded two years ago by Lital Leshem and Lee Moser, the firm says the capital will allow it to write initial checks ranging from $5 million to $15 million into companies developing hardware and software for Israel and international defense customers.

The fund’s size shaped Protego’s strategy. With early portfolio company XTEND completing a U.S. public offering this month, the founders decided against pushing to a $150 million target so that a single standout investment would not have its upside divided among a larger investor base. Protego’s leaders view the vehicle as able to underwrite several mid-sized rounds while retaining room to back winners in follow-on financings.

A group of senior executives at Ares Management committed roughly $30 million to the fund as limited partners — about one-quarter of the total — and were influential in encouraging the two founders to form the firm after the Oct. 7, 2023, attacks on Israel. Leshem, who spent more than a decade in military and intelligence roles and co-founded a company that sold for roughly $625 million in 2025, said her wartime reserve service gave her a new perspective on the kinds of technologies the Israeli defense establishment will prioritize.

Protego’s early investments include XTEND and ASIO, which builds situational-awareness systems and recently announced a collaboration with Anduril. The firm reports strong interest from military operators and defense procurement teams, with officials approaching Protego for demonstrations, training and potential technology adoption — often through informal channels that favor locally connected investors.

The move comes as venture capital flows into defense-focused startups rise globally and as Israeli authorities push state-backed programs to seed military and dual-use tech. The government recently provided guarantees enabling funds such as Adir Capital and Sling Capital to target roughly $33 million for similar investments, and several other groups are raising capital with comparable mandates. Protego declined to participate in a government tender, saying it was already well advanced in its private fundraising.

Looking ahead, Protego plans to launch a second fund in the first quarter of 2027 aimed at a broader remit that would include higher-growth U.S. defense companies and institutional investors in Israel, backed by one sizeable U.S. commitment the firm says it has already secured. Industry observers note that smaller, focused funds can move faster on sensitive procurements and, if they time follow-on investments well, can generate outsized returns — but they also concentrate risk on a handful of outcomes, making portfolio construction and government relationships critical.