Defense-Tech Fund Protégé Ventures Raises $125 Million for First Fund

Protégé Ventures, a defense-technology investment fund founded by Lital Leshem and Li Mozer, has successfully raised $125 million for its inaugural fund. The fund focuses on defense technology companies that have moved beyond the product validation stage, have begun sales, and are seeking to expand into new markets.

Protégé's strategy targets companies that have already brought a product to market but still face challenges with lengthy procurement processes, adapting to the requirements of different national security agencies, and establishing international partnerships. The fund highlights the proximity of Israeli companies to operational needs as a key advantage, allowing for rapid user feedback and product adjustments.

The fund has invested in several companies, including XTEND, which develops robotic and autonomous systems for military use, and ASIO, which creates navigation and situational awareness systems for field operations, even when GPS or communication is unavailable. Protégé also invested in Prisma Photonics, a company developing technology to transform existing fiber optic infrastructure into sensing networks using AI, and Rilian, which builds AI systems for cybersecurity tasks.

This fundraising occurs amid a global increase in defense spending and investor interest in the defense-tech sector. Global defense budgets have risen approximately 50% in the last decade, with venture capital deals in the sector reaching about $20 billion in the first quarter of 2026. The growing demand is driven by a shift towards faster deployment of solutions in areas like drones, robotics, AI, cyber, and sensing.

Protégé Ventures is already planning its second fund, which will aim to include early-stage American defense companies. This move aligns with U.S. government efforts to streamline the procurement of new technologies and boost defense research and development budgets. "One of the greatest advantages of Israeli defense companies is their proximity to the field," stated co-founder Lital Leshem, emphasizing their ability to develop products based on operational needs and receive direct user feedback for rapid improvement.