If there is one piece of advice that everyone seems to bandy about in the defense tech world, it’s “go fast.” And it seems at least one company has taken that seriously to heart.
This morning, just a few months after emerging from stealth, new-age defense tech holding company Valinor announced that it’s raised a $54M Series A, bringing total funding raised to $85M.
The round was led by Palantir-alum-led Friends & Family Capital, with participation from Narya, XYZ Venture Capital, and Fifth Down Capital. Existing investors General Catalyst, Founders Fund, and Red Cell Partners also returned to the table.
“We want to use this capital not only to fuel our five existing product companies, but to fuel the next set,” Valinor’s Catherine McAnney—who leads operations and investor relations—told Tectonic.
“We want to be the most enduring defense tech company. As things change, as we go through hype cycles and waves, we want to be there and want to provide what warfighters and public servants need.”
Pretty lofty goals, but $54M from some of the biggest names in the game ain’t a bad way to start.
New kids on the block: When you think of a holding company, you might think of family offices, smoke-filled rooms, and pin-striped suits—old-school incarnate. Valinor says it’s doing the whole “company-made-up-of-companies” thing a little bit differently.
- The firm was founded by Palantir alum Julie Bush last year and set out to build a new kind of conglomerate for the defense industry that could—put simply—make exactly what operators needed, and fast.
- Their structure is pretty unique—think of Valinor as the umbrella over a bunch of lean, engineering-heavy, product-focused mini companies.
- Valinor’s team handles go-to-market and all of the not-so-fun parts of building a company, then product company GMs handle the products themselves.
- GMs and the product companies also handle production—the whole thing is distributed among a network of manufacturers.
- The company has so far incubated and built its five product companies organically, but has an eye towards acquisition and partnership in the future.
- McAnney says that they’ve put a huge premium on building to Pentagon and government demand—why build stuff if there isn’t anyone there to buy it?
“We start every product company with validated government demand, so we are not building products in a vacuum,” she said. “We know there is a need there. We know there’s a customer there. We know there is—importantly—a buyer there, before we start any product company.”
And they’re not doing it on their own—right out of the gate, the company announced partnerships with Anduril, Palantir, and Helsing.
Unsexy: McAnney told us that the holding company model allows the company to focus on the “unsexy” side of things. Because the central teams handle all of the nuts and bolts of building a business, lean product companies can pretty quickly generate cash flow, which goes back into the business and can fund new product lines.
“The barrier to entry in defense and government is incredibly high,” she said. “To cross that high threshold … you often see a lot of defense tech startups going after the moonshot problems—next generation fighter jets, autonomous boats, nuclear energy.”
Valinor, instead, is focused on “the other 80 percent of problems,” McAnney said. “If you go talk to a warfighter or public servant, they’re not often going to be like, I need the big, sexy platform. They’re going to be like, ‘I need a new gimbal,’ or, ‘Hey, I’d like to not get surgery in a tent on a battlefield when I have a really sexy, $10 billion drone flying over me.’”
Enter: Valinor’s “unsexy” lineup of product companies:
- Harbor: A mobile, new-age medical station designed to treat injured warfighters wherever they are—even way, way out on the edge.
- Reflex: A “smart optics” system with embedded intelligence. Think Meta Ray-Bans, but make it war.
- Dispatch: A modular charging node for unmanned systems.
- Streamline: A secure data integration software for “disconnected environments and distributed teams.” This is already deployable through Palantir Foundry (use your network, friends).
- Condor: A UAV built using a US supply chain designed to be attritable and produced in big ol’ numbers.
The company says that all of these sub-companies are already on contract.
McAnney said a big chunk of this new funding is going to fund the company’s expansion into three new areas: Military construction and infrastructure, munition lifecycle management, and maritime support systems.
“These are all three areas that we believed are fairly overlooked,” she said. “[Things like military construction] is not a large, sexy venture capital-type problem, but our war fighters are living in mold-infested buildings.”
Plus, she added, “there’s a plan to be very acquisitive. We plan to be very creative [with] our corporate partnerships. Because of the holding company model, we have a lot of cap tables that we can play with.”
Sounds like they’re just getting started over at Valinor HQ.