VC Meets DC: How Private Tech Is Shaping America’s Military Edge
The Race to Stay Ahead
Think about it: how long does it take between the time that Congress appropriates a dollar of spending to the Department of Defense and the time it takes for that dollar to actually get spent? Two or three years, maybe more.
Now, think about how long it takes right now in Ukraine for adjustments to be made in drone technologies and underlying AI models. Only 24 hours, maybe less.
Finally, consider this. A Ukrainian drone, costing only $50,000 — roughly the price of a luxury car — took out the Sergei Kotov, a 1,300-ton Russian patrol ship valued at a staggering $65 million. The cost disparity is jaw-dropping: a 1,300-to-1 difference. The Sergei Kotov, part of Russia’s modern Black Sea Fleet and outfitted with advanced defenses — including a state-of-the-art air defense system — was reduced to wreckage by Ukraine’s innovative use of maritime drones.
The point is clear: military power has a new face and form factor. Supremacy is no longer about the size of armies or fleets but about technological superiority — AI, autonomous systems, cybersecurity, and energy innovation. In this new era, the United States is racing to stay ahead, with venture capital (VC) playing a pivotal role in driving innovation.
The New Era of “VC Comes to Washington”
Alumni Ventures’ deep connectivity and perspective have positioned us to witness and shape the growing collaboration between “VC and DC” — notably, the collaboration between Silicon Valley and the Pentagon. For years, we have quietly but fiercely backed U.S. national interests, becoming a centralizing force in community building by hosting entrepreneur events in cybersecurity, defense technology, chips/semiconductors, and nuclear energy. Recognized as a top national security venture capital firm with a #6 ranking in the NATSEC100, we have invested in transformative dual-use technologies across AI, space, and energy, supporting companies like HawkEye 360, Radiant, and Groq.
Our commitment aligns with the Department of Defense’s growing interest in private-sector innovation through programs like the Defense Innovation Unit (DIU) and AFWERX (innovation arm of the Department of the Air Force), as venture-backed startups rapidly reshape both commercial and military applications.
The Shift from Hardware to Technological Supremacy
Military innovation is no longer about who has the largest fleet or the most advanced tanks. Some believe that modern conflicts are defined by speed, precision, and adaptability, all enabled by cutting-edge technologies. Below are the key areas where venture capital is making a profound impact.
1. Artificial Intelligence and Machine Learning (AI/ML)
AI and ML are revolutionizing battlefield decision-making, predictive maintenance, and operational efficiency.
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Threat Detection
Algorithms that process vast datasets to identify risks faster than human analysts. - Home
Decision Support
Tools that evaluate scenarios and optimize strategies in real time. - Home
Autonomous Systems
AI-powered drones and ground robots capable of adapting to dynamic environments.
Alumni Ventures has backed Groq, whose AI processors enhance computational speed, enabling real-time data analysis in high-stakes environments. The U.S. Army used Groq hardware to power Entanglement AI’s cybersecurity anomaly detection, achieving detection rates of up to 120 million inferences per second — 1,000 times faster than traditional methods — enhancing national security by enabling rapid, accurate threat detection with fewer false positives.
2. Cybersecurity
Cyber threats are among the most pressing challenges for modern militaries. Venture-backed startups deliver innovative solutions to protect networks and critical infrastructure.
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Network Defense
Identifying and neutralizing malicious software before it infiltrates. - Home
Resilience
Ensuring secure communication during active cyberattacks.
Companies like CrowdStrike and other venture-backed firms demonstrate how rapid iteration and cutting-edge technology can outpace adversaries in the cyber domain. Alumni Ventures has backed companies like Galvanick, an industrial cybersecurity venture. Galvanick safeguards critical infrastructure such as nuclear reactors and global supply chains, shaping U.S. cyber strategy through leadership roles in government and industry.
3. Drones and Robotics
Autonomous systems are redefining operational capabilities across land, air, and sea. Applications range from intelligence and surveillance to logistics and precision strikes.
Startups like Anduril Industries combine AI with hardware to create integrated defense platforms for situational awareness. Companies such as Picogrid aggregate data from various sensors to deliver actionable insights, further advancing operational efficiency.
Alumni Ventures backed Picogrid in its Seed round, and has made some other drone investments that are not yet public. We have also made investments in robotics, including Ghost Robotics. LIG Nex1 acquired a 60% controlling stake in Ghost Robotics for $240 million — valuing the quadrupedal robotics innovator at $400 million — to advance defense and autonomous robotic solutions.
4. Energy Innovation
Energy is a critical enabler for modern defense, powering everything from autonomous systems to forward operating bases. Examples of innovations in the sector:
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Advanced Batteries
Lightweight, long-lasting power sources for troops and equipment. - Home
Portable Generators
Ruggedized solar panels and fuel cells ensure energy independence in the field.
Alumni Ventures has been an active energy investor, backing companies like Aalo Atomics, Radiant, Thea Energy, and Pacific Fusion. These companies are developing solutions for remote energy and autonomous systems, some in collaboration with government programs.
Radiant, for example, secured a $3.8 million award from the Department of Defense’s Operational Energy Capability Improvement Fund to develop a compact, 1MW, supercritical CO2 cycle turbine-alternator-compressor, revolutionizing energy solutions for military applications. Here’s a snapshot of what Radiant is working on — a reactor that could fit in a space as small as a semi-truck.
5. Space Technology
Space has emerged as a vital domain for secure communications, navigation, and surveillance.
Venture-backed companies like HawkEye 360 are developing radio-frequency mapping from low-Earth orbit, providing real-time intelligence for military and humanitarian missions. Meanwhile, companies such as Impulse Space are extending U.S. dominance to the outer rims of our solar system.
The Strategic Role of Venture Capital
Venture capital is well positioned to accelerate dual-use technologies that transform both commercial and military markets. Why venture acts as a catalyst:
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Bridging Applications
Innovations for commercial use quickly adapted for defense. - Home
Speed and Agility
VC-backed startups prototype, test, and deploy faster than traditional contractors. - Home
Attracting Talent
Startups offer equity, creative freedom, and meaningful missions to attract top-tier engineers and data scientists.
These qualities allow venture-backed firms to deliver innovative solutions at the pace modern threats demand.
Real-World Impact
The impact of VC-backed innovation is already evident.1
Together, these companies demonstrate the transformative power of venture-backed innovation in defense.
The Road Ahead
As the defense landscape evolves, the United States faces both challenges and immense opportunities. The traditional approach to military innovation — dominated by legacy systems and slow procurement cycles — must adapt to the speed and agility of modern technological advancements. Venture capital is positioned to bridge this gap, accelerating the development and deployment of dual-use technologies that will define the next era of defense.
Key areas of focus for the road ahead include:
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Streamlined Procurement Processes
Overhauling government procurement systems to enable faster adoption of cutting-edge technologies. - Home
Emerging Frontiers
Anticipating the potential of quantum computing, hypersonics, biotechnology, and advanced AI in shaping the battlefield. - Home
Talent Retention
Attracting and retaining top-tier talent to ensure the U.S. leads in both innovation and execution.
To maintain its edge, the U.S. must foster deeper collaboration between the public and private sectors, ensuring that innovation is not only developed but deployed at the speed of relevance.
Call to Action
The time to act is now:
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For Investors
Double down on dual-use technologies that can revolutionize defense and national security. Your investments are not just about return; they’re about securing the future. - Home
For Innovators
Embrace the mission. Develop technologies that solve critical defense challenges and advance global security. - Home
For Policymakers
Champion policies that enhance collaboration with the private sector, reduce bureaucratic barriers, and ensure America’s technological dominance.
The intersection of venture capital and defense innovation represents a once-in-a-generation opportunity to shape the future. Together, we can build a safer, more secure world by empowering the technologies that will define tomorrow’s battles — and win them.
Pete Mathias
Partner, U.S. Strategic Tech FundAlumni Ventures' U.S. Strategic Tech Fund is led by Partner Pete Mathias, personally ranked by Business Insider as a Top Defense VC to Watch. Pete joined Alumni Ventures from the $1.5B+ venture capital arm of Bertelsmann, where he was a Senior Director across the European Union, China, and U.S startup ecosystems. Previously a fellow at .406 Ventures and alumnus of the Harvard Innovation Lab, Pete has substantial entrepreneurial and startup operating background. He has an MBA from the Tuck School at Dartmouth, an MPA from Harvard’s Kennedy School, a Master’s with Distinction from Oxford, and a BA (magna cum laude) from Dartmouth. He has recently been selected as a member of the Council on Foreign Relations. Pete has a creative core as drummer for the indie rock band Filligar, which has been designated as “Cultural Ambassador” by the U.S. Department of State. He is an avid skier, marathon runner, and ice hockey player.
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