The money moves just keep on coming. Last week, Business Insider reported that national security VC America’s Frontier Fund—of Venus Aerospace and Foundation Alloy fame—is raising $315M for its deep-tech focused Frontier Fund.
According to a fund insider Tectonic spoke to on condition of anonymity (those pesky SEC regulations), the raise will officially close in September. Currently, they said they’re at around $300M but will “definitely” pass the $315M threshold by then.
The AFF team will focus in particular on advanced manufacturing investments this time around. They also plan to expand their investment portfolio to later-stage companies from the seed and early-stage players they’ve worked with to date.
Major players: AFF was launched back in 2022 by Gilman Louie (former CEO of In-Q-Tel) and Jordan Blashek (formerly of Eric Schmidt’s Schmidt Ventures) as a “non-profit strategic investment fund” focused on deep tech and national security. The stated goal of the fund is to further American interests and “help America thrive together.”
- AFF has a linked AFF Foundation, which both Peter Thiel (Founder’s Fund and ex-PayPal CEO) and Eric Schmidt (ex-Google CEO) have backed. They essentially provided the seed funding to stand up AFF, but are no longer directly involved in the fund.
- AFF has two funds: the Frontier Fund and the Roadrunner Fund. Frontier is focused on the intersection of AI, critical technology, and geopolitics; Roadrunner is focused on pre-seed and seed, and helps scale companies through an initiative called “Roadrunner Venture Studios.”
- The state of New Mexico has invested $100M in AFF—that’s where Roadrunner Venture Studios is based. $50M of that has gone to Frontier, and $50M to Roadrunner.
- The fund has a roster of high-profile advisors including Steve Blank and Anne-Marie Slaughter. Founding board members included Ash Carter and Samuel Palmisano.
Big spender: $315M is a pretty massive fundraise, especially when you consider that funding hasn’t always been the easiest to secure in recent years.
- The fund will comprise $140M in private capital and $175M in government loans.
- According to SEC filings, AFF initially aimed to raise $500M for the fund, but has landed at $315M.
- The $175M in government loans will be repaid over a ten year period and are being doled out as part of the Small Business Investment Company Critical Technology Initiative (SBICCT Initiative), rolled out by the DoD in 2022 and facilitated by the Office of Strategic Capital (OSC).
- America’s Frontier Fund was the first fund to be licensed for the OSC loan program, which announced nearly $1B in available funding late last year.
The fund insider said that while they can’t confirm LPs participating in the fund, they do come from a wide range of backgrounds — everything from manufacturing, to telecommunications, to labs. Seems like everyone is getting into defense tech now.