Investors Interested In Pentagon Counter-Drone Purchases

The Defense Department is looking for technology to counter rivals like China and Russia, and the wave of government spending on counter-drone technology and other autonomous systems has drawn the attention of venture investors.

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Government buyers have spent nearly $1 billion on unclassified “counter unmanned” contract awards since 2019, according to Bloomberg Government data, and burgeoning innovation offices such as the Air Force’s new Task Force 99 are calling for more.

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The technology behind DOD counter-drone capabilities has applications beyond security and warfare, offering a vision of the future of urban mobility and logistics networks.

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Several counter-drone startups this year have landed funding rounds from venture firms and large defense contractors.

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Fortem Technologies on February 21 announced a $17.8 million investment by investors Lockheed Martin Ventures, Hanwha Aerospace, and AIM13|CVP. On the same day, Hidden Level announced a new round from Booz Allen Hamilton’s venture arm. The details of that round were not announced.

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Both deals leverage innovations in counter-drone technology.

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“It’s defining a new generation of warfare,” Jon Gruen, Fortem Technologies CEO, said in an interview. “All governments and companies are having to reevaluate what systems the procure, and the US government is no different.”

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Fortem develops tech designed to capture or incapacitate incoming drones. The aim is to prevent or reduce collateral damage from a drone that would otherwise be falling uncontrolled to Earth after being shot down or disrupted.

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The company’s tools have been deployed in Ukraine in situations like combating Iranian drones in use by the Russian military.

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Beyond Defense

The future of aviation isn’t restricted to planes and helicopters, but will include thousands of drones, vertical takeoff vehicles—like air taxis—and a whole array of autonomous aerial vehicles.

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Programs like the Air Force’s AFWERX technology initiatives fund research and development into electric vertical takeoff vehicles and target similar goals—leveraging the DOD’s need for mobility to give startups the experience needed to pitch their offerings to domestic regulators.

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Hidden Level CEO Jeff Cole found that working with the DOD on counter-drone capabilities easily transferred to providing whole cities the infrastructure needed for advanced urban mobility and drone-powered logistics networks.

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“Our goal is not to focus on what we call point protection of a single entity, it was ‘How do we blanket real large areas like entire cities with minimal infrastructure?’” he said. “We ultimately said, ‘Hey we can also make this extremely cost effective. That same hardware we use in that space is very similar to what we can use with our defense customers.’ So it’s super synergistic.”

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This infrastructure, Cole said, has been a missing link in the future of urban mobility and logistics, even as cutting-edge drone and autonomous aircraft tech advanced. Without a way for governments to track and coordinate traffic in the air, it’s not possible to deploy these new systems.

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Wes Blackwell, with Booz Allen Ventures, recalled his time as a Navy aviator 15 years ago working with vertical-takeoff aircraft: “You go in there and they have Ospreys and they still had Harriers flying and all sorts of helicopters. And I was flying a Seahawk at the time and, like, ‘I’m in Transformers, right?’ But if you think about the picture Jeff’s painting, that is the future,” he said. “That is closer than you think, and that’s coming to every city near you.”

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Defense contracts funding the creation of these networks for the battlefield have given these industries a boost.

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Counter drone companies like Fortem and Hidden Level advertise services to owners of sports venues and airports, event vendors, and anyone interested in drone-based security. Recently Fortem provided security services for the FIFA men’s World Cup tournament in Qatar.

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“The core technology that we’re developing and providing out in this defense market are all applicable to the infrastructure that’s required for the future of mobility, even autonomous ground vehicle and how urban environments function in the future,” Gruen said.

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“We’re working with a number of partners—state level governments, municipalities, enabling people like Walmart and their last-mile delivery—all that is envisioned in the future of mobility and logistics. There’s certainly a strong desire to see it implemented.”