Turns out an old dog can, in fact, learn new tricks.
Yesterday, mom-and-pop shop Lockheed Martin announced that it’s boosting its venture fund (aptly named Lockheed Martin Ventures) from $400M to a cool $1B, marking “the largest boost in investment since the fund was established in 2007.”
The prime says it will use the funds to help “mature critical technologies for national security, helping accelerate the most promising technologies from R&D to availability in the Defense Industrial Base.”
“Our venture capital investments are a critical part of our overall strategy to develop and integrate the best technologies for national security now and in the future,” Lockheed CFO Evan Scott said in a statement. “Our investments help create a pipeline of cutting-edge technologies that create a resilient industrial base, drive growth, and ultimately help the United States and its allies deter the most pressing emerging threats.”
Looks like the big boys are finally realizing that a lot of the tech they need might very well be sitting right here in defense tech land.
Unlikely pairing: A prime VC fund might sound like a bit of an oxymoron, but, like, it’s a thing—Lockheed and RTX (the artist formerly known as Raytheon) both have dedicated VC funds, and Northrop has invested $50M in Firefly Aerospace, for example.
Lockheed’s fund was founded (per their statement) back in 2007, and since then has invested in early- to growth-stage startups that (put simply and maybe cynically) have relevance to the company’s current or future programs.
- They’re not investing for shits and gigs—the fund is more of a scouting arm for the prime. It helps them mature tech that could be helpful for them in the future.
- That can happen in a bunch of different ways—it can mean they invest in a company to access innovation early (before competitors), bring innovative tech in-house via acquisition, bring startups onto their major programs, or even just de-risk a supply chain (like, for semiconductors).
- To illustrate: More than 60 companies have become LM suppliers, scoring over $750M in contracts from the company.
- It’s a similar concept to what’s happening at funds like Booz Allen Ventures or RTX Ventures. Basically, invest in innovation to benefit Papa Prime (and the broader defense industry).
Double down: And they just keep on leveling up—LMV started out with a $100M fund in 2007, grew to about $200M in the 2010s, and doubled to $400M in 2022. Now they’re jumping more than 250 percent to $1B.
Defense tech really is so hot right now.
Cash money: The fund has deployed over $500M into a sprawling portfolio of 120+ companies, but investments are concentrated in a few key areas:
- Space launch and infrastructure (Space is a huge part of the portfolio)
- AI and autonomy
- Counter-drone tech
- Manufacturing (advanced materials and additive manufacturing, for example.)
And they’ve made bets on some companies you will definitely have heard of if you are a regular reader of Tectonic, including:
- Skydio (drones)
- Vatn Systems (UUVs)
- HavocAI (USVs)
- Firestorm Labs (drones and additive manufacturing)
- Regent (seagliders)
- Cambium (advanced materials)
- South 8 (battery tech)
- X-Bow Systems (SRMs)
Tech bros: Investment focus areas (to date and for this new fund) include “quantum computing, autonomy, AI, directed energy, advanced materials, microelectronics.”
So to all you laser, drone, and factory builders—remember not to prime bash too much.