Happy Thanksgiving from NNV, National Defense Spending and Cybersecurity, Fundings: Gobi, BioCatch, Rho Impact
Happy Thanksgiving from NNV, National Defense Spending and Cybersecurity, Fundings: Gobi, BioCatch, Rho Impact
22 November 2023 - A Weekly Publication by New North Ventures
As the holiday season unfolds, we at New North Ventures find ourselves reflecting on the multitude of reasons we have to be thankful. It is with a heart full of gratitude that we extend our warmest wishes to you and your loved ones this Thanksgiving.
In the spirit of the season, we want to take a moment to express our sincere appreciation for the incredible innovators and visionaries we've had the privilege to collaborate with throughout the year. Your dedication to pushing the boundaries of technology and your commitment to bridging the gap between innovation and national defense have inspired us and reaffirmed the importance of the work we do at New North Ventures.
As we gather with our own families and friends to celebrate the blessings of the year, we are mindful that many who serve our nation are spending this holiday away from home. We have a deep appreciation for their service, and for the relationships we've built and the shared journey toward progress and innovation in support of those working hard to protect our collective freedoms. May your Thanksgiving be filled with joy, warmth, and the company of those who bring meaning and purpose to your life no matter where you are.
Thank you for being an integral part of the New North Ventures family. We look forward to continuing our collaborative efforts in the coming year and beyond.
Wishing you a Happy Thanksgiving!
We are excited to celebrate the success of our portfolio company, Headlamp, in securing funding for their pre-seed round.
Led by Founder and CEO Steve J. Chang, the Headlamp team is on a mission to reshape the foundation of American business by facilitating the seamless integration of military veteran talent into various industries.
As a workforce transition accelerator, Headlamp has garnered significant success over the past year, leveraging programs like #DODSkillBridge to connect employers with skilled veterans. The company's inaugural product, SkillBridge-as-a-Service, has proven to be a game-changer, facilitating the onboarding of veterans through DOD-funded fellowships.
The pre-seed round, which raised an undisclosed amount, was spearheaded and strongly supported by New North Ventures. This strategic investment has empowered Headlamp to focus on critical areas such as talent acquisition and infrastructure development, laying the foundation for accelerated growth.
With an eye on the future, Headlamp is actively building an artificial intelligence platform that will enable scalable solutions for large employers in key verticals like microelectronics, advanced manufacturing, dual-use startups, and PE-backed firms.
Hot Topics in National Defense Spending and Cybersecurity
Several weeks ago, we shared news about an event showcasing our esteemed colleague, Jeremy Hitchcock. Now, we're excited to provide key highlights from his panel discussion:
Discussion on Defense Spending: The U.S. defense budget has been on a steady increase, reaching $816 billion for fiscal year 2023 and an expected $842 billion for fiscal year 2024. The Department of Defense's priorities include technology, climate change analysis, space initiatives, infrastructure, supply chain improvements, and research and development across its Critical Technology Areas.
Consolidation in the Defense Industry: The defense industry has experienced significant consolidation among major contractors, including Lockheed Martin, Raytheon, Boeing, Northrop Grumman, and General Dynamics. This trend has attracted increased antitrust and Committee on Foreign Investment in the United States (CFIUS) scrutiny expected to persist into 2024.
Role of Private Innovation: Private sector innovation, exemplified by companies like Microsoft and SpaceX, is recognized as crucial to the U.S. defense strategy. The Department of Defense acknowledges the importance of private sector input in data aggregation, analysis, cybersecurity, and AI to protect national security. The defense industry is particularly focused on developing next-generation data protection in collaboration with private counterparts.
Market Dynamics and Challenges: Despite historical declines in military and budget spending as a percentage of GDP (currently at approximately 3%), the defense market faces challenges such as fewer market entrants, slower adaptability to changing needs, increased backlogs, and delays. Smaller companies reliant on defense spending struggle in a shrinking market, emphasizing the need for adaptation and innovation.
Future Focus Areas: The panelists outlined future focus areas in the defense industry, including cybersecurity, satellite technology, autonomous vehicles/drones, surveillance and target identification systems, and language processing. Space innovation, driven by the creation of the U.S. Space Force and advancements in private-sector space technology, is highlighted as a prominent area of interest, with increased research and development funding expected in satellite technology. This is anticipated to stimulate the M&A market and foster new government/commercial partnerships in the years to come.
The insightful discussion provided by the panelists sheds light on the dynamic landscape of the U.S. defense industry. From the evolving trends in defense spending and the challenges posed by industry consolidation to the indispensable role of private innovation and the anticipated focus on future technologies, the session underscored the intricate interplay between national security, technological advancement, and market dynamics.
U.S. Special Operations and the Shadowy Promise of Irregular Campaigns
American special operations forces, comprising 70,000 personnel from the Army, Navy, Air Force, and Marine Corps, are actively involved in countering various threats globally, including Russia's activities in Europe, supporting allies in Korea, deterring Chinese expansion, combating extremist organizations, and patrolling with African security forces.
The roles of U.S. special operations forces have evolved significantly since 9/11, and their employment should be conceptualized as part of continuous military campaigns. However, there is a challenge in integrating their irregular warfare capabilities into the U.S. military's campaigning methods and tools.
Special operations forces are creating their own irregular warfare campaign constructs, such as the "probe and pick" method for underdeveloped policy areas, the "middle way" involving rotational deployments with a focus on strategic synchronization, and the "deep commit" approach for direct competition or conflict, which often yields excellent results.
Irregular campaigns, when well-conceptualized, provide flexible options that can alter enemy decisions, enhance partner performance, and demonstrate U.S. reach in areas where adversaries prefer to contest power. The article emphasizes the importance of understanding and applying these irregular campaigns to maximize the strategic impact of special operations forces.
Founded: 2023
Key People: CEO Min-seok Kang
Elevator Pitch: An AI creator platform intended to share knowledge, community-building, and innovation converge.
Funding: The company raised KRW 500 million of pre-seed funding from Klim Ventures on November 21, 2023.
Founded: 2011
Key People: CEO Gadi Mazor
Elevator Pitch: Behavioral biometric technology designed to recognize a wide range of human and non-human cybersecurity threats.
Funding: The company raised an estimated $70 million of venture funding from Sapphire Ventures on November 20, 2023.
Founded: 2021
Key People: CEO Gilman Callsen
Elevator Pitch: An impact data platform intended to address the key barriers to impact and ESG planning, tracking, and reporting.
Funding: The company raised $1.13 million of seed funding from Virginia Innovation Partnership, 3rd Creek and Charlottesville Angel Network on November 20, 2023. Preston-Werner Ventures and other undisclosed investors also participated in the round.
Look for a new episode of Securing the Future Podcasts wherever you listen. In our latest episode, we have guest Austin Grey sit down with General Partner Jeremy Hitchcock for an engaging conversation about innovation in the defense space.