The defense tech dollars keep on coming. Late last week, Bloomberg reported that the venture arm of Point72 Asset Management—Steve Cohen’s $40B hedge fund—is raising $400M for a defense tech-focused “Deterrence” fund. The fund, which includes $100M from Cohen himself, is expected to close early next year.
Defense tech may be having a moment, but Point72 isn’t a bandwagon investor. Over the past five years, they’ve become one of the most active institutional investors in defense tech. They’ve led raises for some of the hottest names in the biz, including:
- Shield AI’s $90M Series C in 2021.
- Vannevar Labs’ $12M Series A in 2021.
- Overland AI’s $10M seed round in 2023.
- CX2’s $31M Series A this past May.
Their portfolio also features early investments in Rune, Saronic, and Regent.
Big bucks: Overall, the firm’s defense tech unit has met with almost 900 startups—investing in 18—since 2020. The new $400M “Deterrence” fund, which is expected to make mostly seed or Series A investments, would be one of the largest defense-focused funds in the game—just a little shy of a16z’s $600M American Dynamism fund.
In a recent blog post, the firm wrote that the rise in defense budgets, a bipartisan consensus on expanding the defense-industrial base, and the pace of innovation in the sector underscore the urgency of fueling the growth of the defense tech industry.
“Emerging technologies are a key factor in the global power balance,” the firm said, “At Point72 Ventures, our view is that AI, autonomy, and software-first systems will redefine modern conflict with their prioritization of agility over mass and scale.”
Ride the wave: VC firms have made some big bets on defense tech, pouring $70B into the top 100 startups on the Silicon Valley Defense Group’s NatSec100 list—$41.5B more than the value of the contracts those companies have been awarded to date.
But Point72 says that capital alone isn’t enough to guarantee success. “We believe that succeeding in the defense tech industry requires more than building great products. We think it requires a deep understanding of government systems, timing and policy,” the company wrote.
“Startups that can navigate this complexity stand to deliver transformational capabilities,” they continued. “But to do so, we believe they need investors and advisors who bring not just capital, but clarity, networks and real-world experience.”
Startups may need more than capital, but Point72 isn’t going to be stingy with it. According to documents seen by Bloomberg, Point72 will write checks ranging from $1M to $30M. Let’s see where they place their bets next.