Memorial Day Greetings, Another Win for Reality Defender, Defense Funding Trends, Fundings: Clean Crop Tech, Transcend, Beholder
29 May 2024 - A Weekly Publication by New North Ventures
On Memorial Day earlier this week, our New North Ventures team took a moment to honor and remember the brave men and women who have made the ultimate sacrifice in service to our nation. Reflecting on their selfless contributions, we are reminded of our mission to strengthen national security through investment in and support to innovative and disruptive critical technologies.
We honor the legacy of these heroes by enabling and advancing technologies that protect and empower those who continue on in defense of our nation, ensuring a resilient and innovative America.
In addition to remembering our fallen, it is crucial to continue supporting their families and expressing our gratitude for their profound sacrifices. Their strength and resilience remind us of the importance of community and the enduring impact of service. As we move forward, may the spirit of bravery and dedication that they exemplified continue to inspire us in our relentless pursuit of excellence.
Last week at Latitude59 in Tallinn, Estonia, General Partner Jeremy Hitchcock was on stage [pictured above] with Trisha Saxena (NATO Innovation Fund) and J.D. Englehart (In-Q-Tel) with moderator Allan Martinson (Estonian Founders Society).
Latitude59 featured a number of dual-use and defense tech panels and sessions. We will post a full conference review in the weeks to come.
We are excited to report that Reality Defender was honored as the Most Innovative Startup of 2024 at the 2024 RSA Conference Innovation Sandbox for its pioneering work in detecting AI-generated deepfakes.
Additionally, the team at Reality Defender contributed to Gartner’s Emerging Tech report, sharing their cutting-edge detection methods and industry insights. The report, which addresses the growing threat of AI-driven disinformation, highlights Reality Defender’s multi-model approach that combines machine learning and deep networks to analyze and identify manipulated content in real-time. With experts predicting that 90% of online content could be synthetically generated by 2026, Reality Defender’s scalable solutions are increasingly crucial.
Reality Defender’s platform excels by providing detailed, transparent data, allowing clients to make informed decisions about tampered content. This recognition from RSA and the insights contributed to Gartner underscore Reality Defender’s vital role in protecting digital spaces from AI-driven threats.
Venture Capital Getting Bullish on Defense Tech
During the Cold War, the federal government primarily funded research and development (R&D) in the United States, but this role has increasingly shifted to the private sector, which traditionally hasn't focused much on advanced materials or defense technology components. However, this trend changes as venture capital firms become more comfortable investing in defense startups, encouraged by initiatives such as the Defense Department’s Office of Strategic Capital. By launching a loan program and focusing on strategic capital needs, the office seeks to attract private investment to areas traditionally underfunded by private capital.
Successful integration of private capital into defense tech could yield significant rewards, but failure could discourage future investments. The Office of Strategic Capital aims to create a steady flow of private funding to support startups through their growth stages, ensuring they have the financial resources necessary to contribute to both national and economic security.
Defense Tech Funding Slows At Start Of Year
Defense tech saw significant investment interest last year, with companies like Gecko Robotics, Shield AI, and True Anomaly securing large funding rounds. However, this trend has not continued into 2024. By mid-May, funding for defense startups had dropped to less than half of what it was at the same point last year. In the first quarter alone, funding fell to $118 million, a 74% decline from the previous year's $459 million. By mid-Q2, only $228 million had been raised, a 62% drop from nearly $600 million the previous year. Despite ongoing global tensions, such as the war in Ukraine and issues in the Middle East, defense tech investment has sharply decreased.
The sector's investment slump contrasts with the excitement generated by Anduril's $1.5 billion Series E round in late 2022, which had spurred a surge in funding for defense startups by the end of the year. In 2024, however, there have been no nine-figure raises, with the largest rounds being Privateer's $56.5 million, Defense Unicorns' $35 million, and World View's $25 million. While defense tech funding has slowed, sectors like cybersecurity and robotics have seen increased investment. One large funding round, such as Anduril's potential $1.5 billion, could still significantly alter the sector's financial landscape.
Founded: 2018
Key People: CEO Daniel White
Elevator Pitch: A novel cold plasma technology designed to improve crop yields and reduce food waste.
Funding: The company raised $999,000 of venture funding in the form of convertible debt from E8, MassMutual Impact Investing and other undisclosed investors on May 28, 2024.
Founded: 2017
Key People: CEO Benjamin Brook
Elevator Pitch: A data privacy infrastructure dashboard designed to automatically fulfill access requests and consent changes across every data system.
Funding: The company raised $40 million of Series B venture funding in a deal led by StepStone Group on May 28, 2024.
Founded: 2021
Key People: CEO Andriy Sevryukov
Elevator Pitch: Remote sensing satellite imagery intended for oil and gas exploration.
Funding: The company raised EUR 1.5 million of seed funding from Latitude59 and other undisclosed investors on May 27, 2024.
Look for a new episode of Securing the Future Podcasts wherever you listen. In our most recent episode, general partner Jeremy Hitchcock sits down with Brian Streem, the maverick CEO of Vermeer, for an enlightened conversation about defense procurement, drones, and innovation.
