defense technology is Last year’s popular topics – especially, Gecko Robotics, Shield AI and True Abnormality Despite a string of big funding rounds, the industry hasn’t had a good run this year.
By mid-May, funding was less than half of what it was at the same time last year. Crunchbase dataThis comes despite the war in Ukraine now entering its third year and rising tensions in the Middle East.
Funding for startups in the military, national security and law enforcement industries fell to $118 million in the first quarter, down 74% from the $459 million invested in such startups in the first quarter of last year.
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In the year ending mid-Q2, defense startups raised just $228 million, down 62% from the roughly $600 million they raised at the same point last year. report Anduril The company officially launches a $1.5 billion funding round at a valuation of $12.5 billion.
Where is the cash?
Speaking of Anduril, it was the software and hardware defense technology startup that caused many to refocus on the industry in late 2022. $1.5 billion Series E.
Defense technology has often been a hard sell for venture investors, even though technology developed by startups has been used by the military for decades. They may be reluctant to invest due to their own moral reasons or pressure from LPs.
But the big round for Anduril Fourth largest funding raised by a US-based startup In 2022 — Last year seemed to spur a gold rush for defense startups.
That ultimately led to a flurry of funding at the end of the year, with the defense technology startup raising a whopping $802 million. This quarter’s big deals include:
- Shield AI is a defense and aerospace startup developing AI pilots. Series F raised $200 million at a valuation of $2.7 billion The round was co-led by riot ventures and thomas tull‘s National Innovative Technology Fund in October. The round comes less than a year after the San Diego-based company raised $60 million in December 2022, giving it a valuation of $2.2 billion.
- During December, gecko roboticsThe company develops robots that assess the safety and condition of critical infrastructure. Series C extension raises additional $100 million Led by big names National Innovative Technology Fund and founders fundThe Pittsburgh-based robotics startup announced a $73 million Series C in March 2022.
- Based in Centennial, Colorado, in late December True AbnormalityThe company develops hardware and software systems that support space security and readiness. 100 million dollars In the round I led Riot Ventures. Corporate value has not been disclosed, but reported by bloomberg It hadn’t reached $1 billion yet. The startup helps governments and commercial customers keep an eye on threats to assets in space, such as satellites.
Investment in defense technology slows
But the first four and a half months of this year told a different story.
There are no nine-figure price increases in this space. In fact, the biggest this calendar year are:
- This month, Kihei, Hawaii-based satellite tracking software developer Privateer $56.5 million funding round led by space-focused venture capital firm Aero X Ventures Acquired an analytics company Orbital Insight.
- March, based in Colorado Springs, Colorado defense unicorna software startup that provides open source software and AI capabilities for national security systems, has raised $35 million in Series A funding.
- This month, we will be based in Tucson, Arizona. View of the worldthe stratospheric exploration startup secured $25 million in Series D funding.
Of course, these numbers may not tell the complete story of defense technology funding.
This industry is difficult to define. One of the biggest funding rounds this month is Scaling AI Raise 1 billion dollars in one round Guided by accelerator The data labeling and assessment startup is valued at a staggering $13.8 billion, and while it’s not technically a defense technology company, its data labeling and assessment technology is used in the defense sector.
So while funding for start-ups that are firmly committed to this space is declining, funding for many other overlapping areas, Cybersecurity In the robotics sector, funding increased from the fourth quarter of 2023 to the first quarter of this year.
In cybersecurity, cybersecurity startups raised nearly $2.7 billion in Q1 2024. This was a 69% increase from the previous quarter, when cybersecurity startups raised just $1.6 billion. From Crunchbase data.
The same goes for robotics: Venture funding in the sector jumped from $1.4 billion in Q4 2023 to $2.1 billion last quarter, according to Crunchbase. data.
It’s also important to remember that the numbers involved in defense tech funding are small, so one big round can make a big difference. If Anduril were to raise $1 billion or $2 billion, it would certainly change the complexion of any quarter.
Nonetheless, it is worth noting that there has been a significant slowdown in funding in this sector, even if only temporarily.
methodology
According to Crunchbase data, defense tech is defined by the military, national security, and law enforcement industries. Most announced rounds are reflected in the database, but there may be a slight lag for rounds reported later in the quarter.
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Illustration: Dom Guzman
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