Protego Ventures Closes $125 Million Israeli Defense Tech Fund
Protego Ventures closes a $125 million debut fund for Israeli defense tech, targeting startups with $5 million to $15 million bets and another fund in 2027.
Summary
Defense tech venture dealmaking hit a record in Q1 2026 as Protego Ventures, founded two years ago and describing itself as Israel’s first and largest specialist investor, closed its debut fund at $125 million. Led by Lital Leshem and Lee Moser, Protego will invest $5 million to $15 million per company addressing Israeli and global defense and security needs. It ended fundraising below its $150 million target because first portfolio company XTEND, a drone maker that listed on the NYSE in September 2026, could return the entire fund, while raising more capital would dilute that gain.
Ares Management, among Protego’s largest backers, committed $30 million and proposed the firm after Hamas attacked Israel on October 7, 2023, arguing new technology was needed against emerging threats. The portfolio also includes situational awareness developer ASIO, an Anduril partner. Moser remains a managing partner at AnD Ventures; Leshem has 11 years in military and intelligence, co-founded a startup acquired for $625 million in 2025, and served as a reservist while pregnant after the attack. Israeli authorities granted Adir Capital and Sling Capital about $33 million in state guarantees for military and dual-use investments, while other funds are raising capital; Protego skipped the tender because its fundraising was too advanced. It plans a second fund in Q1 2027, backed by Israeli institutions and a large secured U.S. commitment, with a broader remit covering early-growth U.S. defense tech companies.
Positives
- Protego Ventures closed its debut fund with $125 million and can invest $5 million to $15 million per company.
- XTEND listed on the NYSE in September 2026 and could generate enough returns to repay Protego’s entire debut fund.
- Ares Management supplied $30 million in early backing, allowing Protego to begin investing immediately.
- ASIO adds situational awareness technology and an existing partnership with U.S. defense company Anduril to Protego’s portfolio.
- A secured large U.S. commitment and Israeli institutional backing support a planned second fund in Q1 2027.
Risks & concerns
- Protego stopped at $125 million, falling $25 million short of its original $150 million fundraising target.
- XTEND’s potential to carry the fund also concentrates Protego’s expected returns around one portfolio company.
- Adir Capital and Sling Capital received about $33 million in state guarantees that Protego did not pursue.
- Other Israeli funds are raising money for military and dual-use startups, increasing competition for deals and capital.
- Israel’s defense market is difficult for outsiders to navigate, making access heavily dependent on established local networks.