Israel’s defense tech sector is witnessing unprecedented growth, fueled by innovation and global interest. The latest development in this booming industry is the establishment of Protego, a newly launched venture capital fund dedicated exclusively to investments in military technologies.
Within just two weeks, the fund has raised $70 million in commitments, with its final closing now projected to reach $200 million – well above its original $150 million target due to strong interest, primarily from institutional investors in the United States.
The fund is led by two young entrepreneurs, Lital Leshem, 38, and Lee Moser, 39. Protego is the first Israeli fund focused entirely on defense tech and has already made its first investment: $5 million in the drone company XTEND. The fund is currently reviewing dozens of additional startups in an ecosystem that has seen a surge of new companies emerge both before and after the recent war.
Despite being relatively young, Leshem and Moser are established names in Israel’s tech landscape. Moser is a founding partner at AnD Ventures, a venture capital fund, and previously served as chief of staff to Michael Oren during his tenure at Israel’s Embassy in Washington. She plans to maintain her role at AnD Ventures while also contributing to Protego. Leshem, on the other hand, will actively manage the new fund.
Part of a broader trend in Israel’s defense tech ecosystem, which has seen a surge of activity in recent months
She brings extensive experience from co-founding Carbyne (formerly Reporty) in 2014, a startup aimed at modernizing emergency response systems. The company’s first investor was former Prime Minister Ehud Barak, and it has since raised $140 million, including its most recent round led by AT&T. Carbyne is now on the verge of achieving unicorn status, with its next funding round expected to push its valuation past $1 billion. Although Leshem no longer has an active role in the company, she retains shares. In recent years, she worked with Erik Prince, founder of the U.S. defense company Blackwater, representing him in the UAE before the Abraham Accords were signed.
The idea for Protego was born during an advocacy trip by Moser and Leshem following Leshem’s release from several months of reserve duty with the Gaza Division. During the trip, which included a delegation from Kibbutz Nir Am, the two met with leading figures in U.S. industry who expressed significant interest in Israel’s military technologies. These conversations laid the foundation for the creation of Protego, which aims to capitalize on the growing global demand for advanced defense solutions.
Protego is part of a broader trend in Israel’s defense tech ecosystem, which has seen a surge of activity in recent months. Former IDF Chief of Staff Aviv Kochavi recently joined AWZ Ventures to lead investments in security-focused technologies, while former Israeli Air Force Commander Amikam Norkin has established a new investment fund in the fields of defense, aviation and aerospace. Norkin’s fund is a collaboration with KEY1 Ventures, with Harel Insurance serving as an anchor investor. The fund plans to invest in both Israeli and international companies, with a primary goal of bolstering Israel’s aerospace ecosystem.
Israeli Air Defense System
(Video: IDF Spokesperson's Unit)
Global venture capital funds are also increasing their involvement in Israel’s defense tech scene. U.S.-based Lux Capital recently made its first investments in Israel, joining established players like Sequoia and Andreessen Horowitz, which have expanded their activity in the country. This summer, a delegation of leading American VCs visited Israel to explore opportunities in defense innovation. Meanwhile, Israeli fund 10D has strengthened its focus on defense tech by adding Alon Kantor as a partner to lead investments in the sector.
These investments reflect a unique window of opportunity in Israel, driven by global demand for advanced military technologies. The dramatic shifts in the Middle East and the ongoing war between Ukraine and Russia have drawn international attention to the potential of Israel's defense tech ecosystem. In recent years, conflicts have caused a profound shift in military paradigms, favoring small, unmanned aerial systems over larger, more cumbersome platforms.
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As defense budgets increase worldwide, governments are streamlining procurement processes and showing greater openness to collaborating with startups rather than relying solely on traditional defense contractors. Both NATO and the Pentagon have launched new initiatives aimed at enabling more flexible partnerships with startups, encouraging venture capitalists – who were previously hesitant to invest in companies dependent on government contracts – to enter the defense tech sector.
Protego and similar funds are seizing this moment to invest in Israel’s thriving ecosystem, positioning the country as a global leader in the next generation of military innovation. With a growing number of startups, visionary leadership and unprecedented global interest, Israel’s defense tech industry is poised to shape the future of warfare and defense technology.