Historically, the fields of defense and venture capital rarely intersected, but that has changed. In the first quarter of 2026, defense tech VC deal activity reached an all-time high, and new VC firms dedicated exclusively to defense startups have emerged globally.

Among these is Protego Ventures, established just two years ago, which claims to be the first and largest VC exclusively focused on defense technology in Israel. Led by two prominent women, Lital Leshem and Lee Moser, it has successfully finalized its inaugural fund with $125 million in capital commitments, as reported exclusively by TechCrunch.

This fund size allows Protego to invest between $5 million and $15 million in each company, primarily targeting startups that “address the urgent defense and security needs of Israel and the global community,” according to their website.

This includes drone manufacturer XTEND, its inaugural portfolio company, which debuted on the NYSE earlier this month. This is also the reason Protego did not reach its $150 million goal: a smaller fund amplifies the impact of a major success on overall returns, and with XTEND emerging as a potential “fund maker” — an investment that could yield returns for the entire fund — seeking to raise additional capital could dilute that advantage among a larger investor group. “Nobody wants to share the pie,” Leshem noted.

Ares Management stands out as one of Protego’s primary supporters. The investment firm encouraged Leshem and Moser to collaborate and launch Protego following the Hamas attack on Israel on October 7, 2023, believing that innovative technologies would be essential for enhancing Israel’s defense capabilities against new threats, as stated by Leshem.

With a $30 million investment as a limited partner, Ares provided Protego with the necessary backing to begin investing immediately, according to Leshem. Beyond XTEND, its portfolio features companies like ASIO, which creates situational awareness systems and has established a partnership with Anduril.

Leshem indicates that the response from the defense community has been positive. “On the military side, there is a lot of respect, and people are coming — even discreetly — to discuss with us, to learn from us, to train with us, and surely to access our technology and innovation.”

However, navigating the Israeli market is more straightforward for insiders, and Protego’s founders are utilizing their networks. Moser, an experienced venture capitalist, will continue as a managing partner at the generalist VC firm AnD Ventures. Leshem, who co-founded a startup sold for $625 million in 2025, also brings over 11 years of military and intelligence experience to their strategy.

“Everything changed on October 7,” Leshem recounted to TechCrunch. While pregnant, she served as a reservist on the day of the attacks. “Until the delivery room, I was there, observing firsthand how the battlefield was different from what I had known over the past decade.”

Protego won’t have the market to itself for long. Israeli authorities are also aware of the shift, providing 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 generating capital for similar ventures. (Leshem mentioned that Protego was too far into its fundraising to take part in the government’s tender.)

Conversely, Protego is already strategizing its next initiative: a second fund anticipated in the first quarter of 2027, supported by Israeli institutional investors and a significant U.S. commitment that Leshem has already obtained, with a wider focus that includes early-growth American defense-tech firms.

This story was updated to correct the amount Protego will invest in companies.