Whoever thought the defense tech investment hype cycle was coming to an end, think again. Late last week, California-based VC fund MVP Ventures announced that it’s raised a $125M Fund II, nearly quadrupling its $35M Fund I.
MVP Managing Partner Weston Moyer told Tectonic that about 12-15 percent of that will go to defense tech—six to eight investments—with the remaining allocated to other AI-focused startups.
They’re putting a big ol’ premium on companies that have a “physical world component”—about half of their investments will be in companies that make, well, real things you can touch, like robotics or manufacturing systems.
We’re excited about a handful of areas within defense,” he said, “One is just rebuilding the arsenal. In fund two, we invested in Saronic about a year and a half ago. We invested in two unannounced missile interceptor companies. But we’re also excited about just rebuilding the manufacturing base.”
In addition to Saronic, the fund has invested in a whole slew of deep tech heavy hitters, including Anduril, Stoke Space, Gecko Robotics, and Loft Orbital.
Home team: MVP was founded way back in the pre-historic era of 2020 by Andre De Baubigny and Weston Moyer. The team calls themself the “most value per dollar investor,” which seems like a pretty big claim tbh, but is rooted in the fund’s focus on providing a whole lot of support to startups after they write those checks.
- According to MVP, “nearly half” of their team is focused on the post-investment side of things—helping founders build teams and their products.
- For defense and other government-related companies, they’ve hired former national security advisor and DoD staffer Jonathan Rue as their “go-to-market” guy in DC—the person who knows the ins and outs of the Pentagon and the acquisition process.
“If you’ve never been in DC and have never played that game, it is almost impossible for you to figure that out in the first couple of years,” Moyer said, “If we love a founder and want to back them…but they don’t have the DC connections, we don’t think that should be why their company fails.”
They’re also extra-interested in companies where at least one member of the founding team knows how to sell into government.
Dig in: When asked if he would do anything differently with Fund II than Fund I, he said that this new fund was mostly about “doubling down.”
“A lot of Fund I is working. A lot of our strategy is working. Our goal is to be the most valuable partner on the cap table of our founders,” he said.
Most of their investments are early-stage, and MVP aims to secure about 2 percent ownership in the companies they invest in. (Sadly, Moyer confirmed, they weren’t early enough to do that with Anduril. Tough.)
That means that for seed rounds, their checks are generally about $1M, and for Series A about $2-3M. Moyer said that they’ve already invested about half of Fund II, and will continue to deploy out of the fund for the next year and a half. In total, they plan to invest in about 50 startups.