
DCVC DTOR 2024: Startup thinking will help the defense and security sectors prepare for new threats

The 2024 edition of the DCVC Deep Tech Opportunities Report explains the guiding principles behind our investing and how our portfolio companies contribute to deep tech’s counteroffensive against climate change and the other threats to prosperity and abundance. The fifth chapter of the report focuses on defense and is divided into two sections; this is the first.
What President Dwight Eisenhower called the “military-industrial complex,” dominated by a handful of consolidated defense contractors, emerged during and after World War II in part because projecting world-leading military power takes coordinated, continued investment on a scale only national governments and big companies can afford. But the landscape of threats and vulnerabilities has shifted, and today smaller players, including venture-scale startups, can contribute to maintaining and modernizing our defense infrastructure.
First, there’s a new domain where offensive and defensive capabilities take a very different form: cyberspace. When computer systems are globally interconnected, they can be globally disrupted. “The next series of [cyber] attacks are going to be AI-generated,” says DCVC general partner Ali Tamaseb. “And we need to be able to catch that with AI.”
Second, we’ve entered an era when small, inexpensive weapons pose a growing threat. Today drones and other commercial-off-the-shelf (COTS) technologies can quickly, cheaply, and stealthily carry out high-precision single-use strikes. That makes our traditional “big iron” platforms such as tanks, planes, and surface ships look increasingly lumbering. The Ukrainian military, for example, has been able to use airborne drones, some costing only a few hundred dollars, to monitor the movement of Russian forces, identify artillery targets, drop munitions on tanks and trenches, and damage military installations. At sea, Ukraine has used remote-controlled drone boats to hit multiple Russian targets.
The world’s largest militaries are not adjusting quickly to these asymmetric threats. “It’s still important to build systems that can deliver a lot of throw weight against our adversaries,” says DCVC managing partner Matt Ocko. “Rockets, artillery systems, ICBMs aren’t going away. But today someone with relatively small financial resources and few connections could put together a private army, air force, or navy and degrade the U.S. Sixth Fleet [which operates around Europe and Africa] as a combat operational group. The technology is there to do this right now. And frankly, that should concern us tremendously.”
At DCVC, we believe entrepreneurs can help counter asymmetric threats and regain a technology advantage over our real and potential adversaries. Fortem Technologies, the leader in AI-powered drone-hunting systems, is a prime example. The company builds small, high-definition radar systems — from the size of a pencil box to that of a laptop — that enable drone-on-drone defense. Its DroneHunter drones can detect other fixed-wing and rotary drones and fire countermeasures such as tether nets that bring the enemy craft to the ground without destroying them. “The Ukrainians have also been particularly successful in reprogramming the captured drones and using them against the Russians, which saves the Ukrainians considerable time and money that would otherwise be spent on purchasing and programming their own drones,” says Fortem CEO Jon Gruen. The same net drones have been used to protect the World Economic Forum in Davos and the World Cup in Qatar.
Geospatial intelligence is another key to anticipating and defending against attacks. In this area we’ve invested in Capella Space, whose constellation of synthetic aperture radar (SAR) satellites offers 24⁄7, all-weather imagery of Earth’s surface. Together with Planet, DCVC’s first space investment in 2013, Capella is imaging Earth every day and helping security officials detect changes on the ground and anticipate threats. And thanks to SAR’s high resolution and high contrast, as well as Capella’s high revisit rate, buyers of the company’s unclassified images can better monitor sea lanes, ports, and other facilities to track the arrivals and departures of ships and aircraft. (Editor’s note: this May, quantum computing leader IonQ [NYSE: IONQ], which is establishing a space-to-space and space-to-ground quantum-secure internet, announced that it had signed a definitive agreement to acquire Capella.)
AI technology from a DCVC portfolio company called Primer is another compelling example of a dual-use technology that can aid in national defense as well as commercial applications. The company monitors both proprietary and publicly available data, such as text, audio, and video, and uses AI models to organize and summarize it and help analysts identify changes linked to critical entities, locations, or events. Primer can also help make sense of the data held inside a customer’s organization, says DCVC operating partner and Primer board member Clay Hutmacher, who is a retired major general and former director of operations for the U.S. Special Operations Command. The Department of Defense is “applying [Primer’s] AI to questions like, How would the Air Force and the Navy quickly disperse ships in the event of a conflict?” Hutmacher says. “How can they improve maintenance procedures on aircraft and ships and to give them more operational availability?”
The reality, we think, is that many of the ideas the U.S. military needs to stay ahead of both near-peer adversaries and smaller foes can and should come from the startup world. In Washington, D.C., we’ve advocated for increased investment in efforts such as the Defense Innovation Unit (DIU), which is working to accelerate the adoption of commercial technology throughout the military. We’ve also pushed for more spending within the combatant commands to support testing and adoption of such technologies. And together with other defense-tech investors, we intend to back more Silicon Valley – style companies creating a new backbone of distributed, autonomous, intelligent, affordable systems.
The 2025 edition of DTOR will be released in late June.
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