The traditionally siloed worlds of defense and venture capital are rapidly converging, heralding a transformative period for national security innovation. This burgeoning overlap is underscored by a record-setting first quarter in 2026 for defense tech venture capital dealmaking, a trend that has spurred the emergence of specialized VC firms worldwide dedicated solely to investing in defense startups. Among these pioneering entities, Israel’s Protego Ventures has distinguished itself, announcing the successful final close of its debut fund with $125 million in capital commitments, as exclusively learned by TechCrunch. This significant milestone establishes Protego Ventures, founded just two years ago and notably led by two women, Lital Leshem and Lee Moser, as a pivotal player in the global defense technology landscape, particularly within the strategically critical Israeli ecosystem.
The Resurgence of Defense Tech: A Global Phenomenon
The acceleration of investment into defense technology is not an isolated incident but rather a symptom of a profound shift in global geopolitics and technological advancement. For decades, defense innovation was primarily the domain of large, established contractors, often slow-moving and reliant on government contracts with lengthy procurement cycles. However, recent years have witnessed a dramatic re-evaluation of this model. Escalating global tensions, particularly exemplified by the ongoing conflict in Ukraine, persistent instability in the Middle East, and growing strategic competition in the Indo-Pacific, have highlighted the urgent need for agile, cutting-edge defense capabilities.
This necessity has converged with the rapid maturation of commercially developed technologies—such as artificial intelligence (AI), autonomous systems, advanced robotics, cybersecurity, and space-based applications—which possess significant dual-use potential. Venture capitalists, traditionally focused on consumer and enterprise software, are increasingly recognizing the vast market and strategic imperative in applying these innovations to defense challenges. Industry reports from Q1 2026 indicate an unprecedented surge in deal volume and capital deployed into defense tech startups, with total investments estimated to have surpassed $5 billion globally in that quarter alone, representing a substantial year-over-year increase from previous periods. This trend reflects a broader acceptance that innovation from the private sector is essential to maintain a technological edge in modern warfare. Firms like Andreessen Horowitz with its A16Z National Security initiative, and Shield Capital, among others, have also emerged or expanded their focus, indicating a robust and growing asset class within venture capital.
Protego Ventures: Spearheading Israel’s Defense Innovation
At the forefront of this new wave, Protego Ventures stands out as Israel’s first and largest dedicated defense tech VC. The $125 million secured for its inaugural fund will enable Protego to deploy substantial capital, with individual investments ranging from $5 million to $50 million per company. The fund’s stated focus is on startups "addressing the critical defense and security needs of Israel and the global community." This dual mandate reflects not only Israel’s inherent security imperatives but also its role as a global exporter of advanced defense technologies.
The leadership of Protego Ventures is particularly noteworthy. Lital Leshem and Lee Moser bring a potent combination of deep industry insight and seasoned investment acumen. Leshem, with over a decade of experience in military and intelligence fields, coupled with a successful entrepreneurial exit, offers an invaluable operational perspective. Moser, a respected figure in the Israeli venture capital scene and a managing partner at the generalist VC firm AnD Ventures, contributes extensive financial and strategic investment expertise. Their combined leadership challenges conventional perceptions within the male-dominated defense sector and underscores a meritocratic approach to identifying and nurturing crucial technological advancements.
The Genesis of Urgency: October 7 and Its Aftermath
The impetus for Protego Ventures’ formation is deeply rooted in the seismic events of October 7, 2023. The brutal Hamas attack on Israel served as a stark and immediate catalyst, fundamentally reshaping the perception of defense needs and technological readiness within the nation. Lital Leshem’s personal account provides a visceral understanding of this transformation. Deployed as a reservist on the day of the attacks, even while pregnant, she witnessed firsthand the profound changes in battlefield dynamics. "Everything changed on October 7," Leshem recounted to TechCrunch. "And 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 direct, impactful experience fueled a conviction shared by many that traditional defense paradigms were insufficient against evolving threats. It was in this urgent atmosphere that Ares Management, a global alternative asset manager with significant holdings, recognized the critical need for a specialized investment vehicle. Ares strategically suggested that Leshem and Moser join forces to establish Protego Ventures, believing that new technologies would be paramount in bolstering Israel’s defense capabilities. Their conviction was backed by a substantial $30 million investment as a limited partner, providing Protego with the crucial anchor support needed to commence investing immediately. This foundational backing from a prominent international financial institution not only provided capital but also lent significant credibility and momentum to the nascent fund.
A Foundation of Expertise: Protego’s Leadership and Network
The success of Protego Ventures is intrinsically linked to the exceptional backgrounds and extensive networks of its co-founders. Lital Leshem’s eleven years in the military and intelligence field provided her with an unparalleled understanding of operational gaps and future defense requirements. This direct insight into frontline challenges is invaluable for identifying and evaluating startups with genuine potential to impact national security. Furthermore, her entrepreneurial journey, culminating in the 2025 acquisition of her co-founded startup Carbyne for $625 million by Axon, demonstrates her capability to scale technological solutions. Carbyne, a leading provider of emergency response technology, exemplified the critical intersection of advanced tech and public safety, experience directly transferable to defense applications.
Lee Moser, as a seasoned venture capitalist, brings the essential financial acumen and a proven track record in identifying promising early-stage companies. Her continued role as a managing partner at AnD Ventures further solidifies her position within the broader tech investment ecosystem, offering Protego access to a wider network and a diverse deal flow perspective. The combination of Leshem’s operational depth and Moser’s investment prowess creates a formidable leadership team, uniquely positioned to navigate the complexities of both the defense and venture capital sectors. Their deep-rooted connections within the Israeli defense establishment are particularly advantageous in a market where insider knowledge and trust are paramount for sourcing and supporting high-impact technologies. As Leshem noted, the reception within defense circles has been robust: "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." This indicates a strong appetite within the defense community for rapid innovation and collaboration with agile private sector entities.
Pioneering Investments: Portfolio Highlights and Strategic Wins
Protego Ventures has swiftly built a portfolio that showcases its strategic investment philosophy. Its inaugural investment, drone maker XTEND, has already achieved remarkable success, going public on the NYSE earlier this month. XTEND specializes in human-machine teaming technology for drones, enabling operators to control multiple autonomous systems with intuitive interfaces, critical for complex battlefield scenarios and urban warfare. This public listing not only validated Protego’s investment thesis but also significantly impacted the fund’s trajectory.
The success of XTEND illustrates the concept of a "fund maker" – a single investment that has the potential to return the entire fund’s capital. This exceptional early win directly influenced Protego’s decision to conclude its debut fund at $125 million, stopping short of its initial $150 million target. As Leshem candidly explained, "Nobody wants to share the pie." A smaller fund size amplifies the impact of such a monumental success on overall returns for existing limited partners, ensuring that the upside from XTEND’s IPO is concentrated among the current investor base rather than diluted by additional capital.
Another key portfolio company is ASIO, which develops advanced situational awareness systems. ASIO’s technology aims to provide real-time, comprehensive intelligence to military units, enhancing decision-making and operational effectiveness. The significance of ASIO’s work is further validated by its partnership with Anduril, a prominent American defense technology company known for its innovative approach to national security challenges. Anduril, founded by Palmer Luckey, has rapidly grown by developing AI-powered defense products, including autonomous surveillance systems and counter-drone technologies, and its collaboration with ASIO signifies a mutual recognition of cutting-edge capabilities and a strategic alignment in modernizing defense. These early investments highlight Protego’s focus on technologies that offer immediate and tangible improvements to defense and security operations, both in Israel and globally.
Israel’s Dynamic Defense Tech Ecosystem
Israel’s unique geopolitical position and its "Startup Nation" ethos have cultivated a vibrant and highly innovative defense technology ecosystem. Mandatory military service for most citizens, particularly in elite intelligence and technology units, provides a continuous pipeline of highly skilled personnel with firsthand experience in defense challenges. This, combined with high national R&D spending and the constant imperative for security innovation, creates fertile ground for defense tech startups.
The Israeli government is acutely aware of the strategic importance of nurturing this sector. While Protego Ventures operates independently, Israeli authorities have also launched initiatives to bolster defense tech investment. For instance, the government awarded state guarantees totaling approximately $33 million to VC firms Adir Capital and Sling Capital to invest in military and dual-use technologies. These programs underscore a national imperative to leverage technological prowess for security, complementing private sector efforts like Protego Ventures. Leshem clarified that Protego was too far along in its own fundraising process to participate in the government’s tender, but the existence of such programs highlights a concerted national effort to maintain Israel’s technological edge. Analysts suggest that this increased government backing signals a proactive strategy to foster both indigenous innovation and attract foreign investment into critical defense areas, ensuring Israel remains at the forefront of security technology.
Looking Ahead: Expansion and Global Impact
Protego Ventures is not resting on its early successes. The firm is already planning its next strategic move: a second fund slated for the first quarter of 2027. This follow-up fund is envisioned with an expanded scope, aiming to include early-growth American defense-tech companies alongside its Israeli focus. This geographic diversification signals Protego’s ambition to become a more globally relevant player in the defense tech investment space, leveraging its unique insights and network to identify promising ventures beyond Israel’s borders. Lital Leshem has already secured commitments from Israeli institutional investors and one large U.S. commitment, indicating strong confidence in Protego’s model and future potential.
The implications of Protego Ventures’ emergence and expansion are significant. For Israel, it reinforces its position as a global leader in defense innovation, attracting further capital and talent to its tech sector. By backing cutting-edge startups, Protego contributes directly to strengthening Israel’s strategic autonomy and enhancing its capabilities in an increasingly complex security environment. Globally, the rise of dedicated defense tech VCs like Protego signifies a maturation of the market, moving beyond historical ethical debates that sometimes constrained investment in military applications. The focus on dual-use technologies—innovations that serve both civilian and military purposes—further broadens the appeal and viability for venture capital. As agile, VC-backed startups continue to challenge the dominance of traditional defense contractors, they are poised to play an ever more critical role in shaping the future of warfare and national security worldwide. Protego Ventures is clearly positioned to be a key architect in this evolving landscape.
