Protego Ventures closes debut $125 million fund for Israeli defense tech

A new $125 million venture fund is now investing in defense technology startups.

Protego Ventures, a new venture capital firm focusing on Israeli defense technology, has closed its debut fund with $125 million in capital commitments. The fund aims to invest between $5 million and $50 million in startups addressing critical defense and security needs for Israel and the global community. Led by Lital Leshem and Lee Moser, Protego is positioned as Israel's first and largest dedicated defense tech VC. Ares Management is a significant backer, providing $30 million to help launch the firm following the October 7, 2023, Hamas attack, which highlighted the need for advanced defense technologies. The firm has already invested in drone maker XTEND, which recently went public on the NYSE, and ASIO, a situational awareness systems developer. Protego is planning a second fund for early 2027 with a broader scope, including U.S. defense-tech companies.

The emergence of specialized venture capital firms like Protego Ventures signals a significant shift in the investment landscape for defense technology. This dedicated focus reflects a growing recognition of the sector's potential, driven by geopolitical events and the increasing integration of advanced technologies like AI and drones into military applications. The substantial capital raised, coupled with strategic investments in companies like XTEND, indicates a maturing market where both innovation and significant financial returns are anticipated.

This trend affects not only defense contractors but also a broader ecosystem of technology startups and investors looking for high-growth opportunities in a sector historically perceived as niche. The success of Protego's debut fund and its plans for a second fund with an expanded focus suggest that defense tech is becoming a more mainstream and attractive investment area. Investors and entrepreneurs should monitor the performance of these specialized funds and the subsequent technological advancements they will likely spur.