Trends in Defense Tech Startups/VC
Trends in investing of the startups of the future of homeland defense
Welcome back to my newsletter where I highlight one Venture Capital Concept, one useful framework, and many resources about the topic. I also included some free goodies at the Bottom (Investor databases)
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1. Useful Life Framework: Key Principles: Failure is a skill (Dont be scared to hone it)
People misconceive failure as a lack of skills or progress. Failure is a skill that MUST be honed to provide more favorable outcomes. As humans, we are more scared of the negative outcomes related to failure without realizing it’s only a byproduct of the inputs we provide
Principle 1: Frame failure as a necessary step in the learning process. Expectation management is everything and you should never have unrealistic expectations.
Principle 2: Never be married to the outcome especially when the chance of failure is moderate. Focus on the learnings and not the byproduct
Principle 3: If you feel failure will heavily impact your personal needs (monetary, social etc.) consider providing risk mitigation steps or work towards microgoals.
2. Insights: Trends in 2024 Defense Tech Technology
Focus on Counter-Drone Technology The ongoing conflict in Ukraine has highlighted the critical role of drones on the battlefield. Drones are becoming increasingly important for several reasons:
Real-time logistics: Drones provide live video feeds across the battlefield without relying on satellite imagery.
Targeting: Unlike artillery, drones can target specific areas, vehicles, and soldiers with precision.
Suppression: Drones can suppress missile and air attacks effectively.
A major factor driving the increased use of drones is their cost-effectiveness. Drones are significantly cheaper to produce compared to most other weapons. These inexpensive drones can destroy expensive, high-tech weapons, providing a substantial economic advantage. For instance, drones used by Houthi rebels cost around $2,000 each, while it costs the US military $2 million to shoot one down.
Increased Spending on Robotics The military's focus on artificial intelligence and robotics is intensifying. The market for military robots is projected to reach $24.2 billion by 2025, with a compound annual growth rate (CAGR) of nearly 11%, rising from $17 million in 2015 to $379 million in 2021.
The military is even contemplating the formation of a new robot platoon. Military robots are valuable in combat for various reasons:
Risk mitigation: Robots can undertake dangerous tasks, reducing potential human casualties.
Enhanced capabilities: Robots can stay operational 24/7, have 360-degree vision, and can process information instantaneously.
Major Advances in Hypersonic Systems Hypersonic systems refer to objects traveling at speeds five or more times the speed of sound (761 miles per hour). In 2022, the Pentagon allocated $3.8 billion for hypersonic research and is requesting $4.7 billion this year. The US has several hypersonic weapons under development and successfully tested a missile in March 2022. Additionally, the Missile Defense Agency has a budget of $247.9 million for hypersonic defense. Private companies in the US are also racing to develop hypersonic technology, such as Hermeus, a start-up working on a remotely piloted hypersonic aircraft.
The Growing Threat of Cyber-Warfare Cybersecurity is now a matter of national security. The military categorizes cyber warfare within the "gray zone," the space between peaceful operations and conventional warfare. Cyber warfare is marked by ambiguity and deniability, complicating defense and decision-making processes. Recent cyberattacks have become increasingly war-like, threatening civilians and causing significant disruptions. The US Cyber Command is seeking to increase its annual budget to $1.1 billion to enhance advanced training, operational support, and intelligence capabilities targeting strategic competitor threats.
3D Printing Offers Opportunities for New Materials and Manufacturers Additive manufacturing, or 3D printing, is creating new opportunities for military applications. In January 2021, the Department of Defense released its first strategy for additive manufacturing, aiming to modernize systems, increase readiness, and foster innovation. The US Army is using 3D printing to produce new types of munitions, expecting higher velocity, longer range, and improved penetration. Additionally, the Army plans to 3D print a military truck exterior in one piece. Amid supply chain issues and rising demands, the US Navy faces shortages of castings, forgings, and fittings for submarines, which 3D printing could help alleviate.
3. Resources: List of Useful Investor databases
All accelerators by number of investments: https://lnkd.in/dAYmiS43
Top 100 Venture Funds by Number of Investments: https://lnkd.in/d7MyGgEK 2000 US VCs: https://lnkd.in/dfNKNGZP 350 Most Active Angel Investors in the US: https://lnkd.in/d-n9HgSy Top 300 Angel Investors in the Middle East: https://lnkd.in/dvicQyt9
Thanks for reading, I hope to see you back soon
Email: gonzaleschris365@outlook.com