Editor’s Brief1
Last Week I put together a financial model on Anduril to answer the question, what has to be true for the market to pay $90B? I included a full model covering Anduril’s product catalog, federal obligations, defense-industry comps and the investor-return math you can access here.
This week, is a quick article. I put together a dashboard covering SVDG’s Natsec 100 showing capital, contracts, & valuations. Ill be updating it with more companies than just the Natsec 100 and more features so throw a save or bookmark on the page for future reference.
Click here for the interactive searchable dashboard.
Signal Brief: $73B in private capital. $14B in federal obligations.
[Contracts from 952 of SVDG’s NatSec100 companies, FY2020–FY2026.]
The NatSec100 is the “top” of the much larger field of Defense Tech. 50 companies on the list with disclosed valuations are worth about $280B combined. Even at a generous 10x revenue, that takes roughly $28B a year in sales to justify while federal obligations to the whole cohort averaged about $2B a year.
Over the same period, Lockheed Martin alone was obligated about $430B, roughly 30 times the entire cohort.
The usual takeaway is that the Pentagon is failing its new entrants. The capital is there, the technology is there, and the government just won’t write the checks.
Some of that frustration is earned as plenty of founders have watched a successful prototype go nowhere for two years.
But there’s an incentive at work too. A startup’s next round depends on a story about future government revenue, and “the Pentagon is broken” is an easier story to tell investors than “our product hasn’t proven it’s worth buying yet.”
And “just fund the new entrants” can’t mean funding all of them. Taken literally, it asks the Pentagon to underwrite the long tail of venture portfolios, turning a risk investors chose to take into a subsidy taxpayers didn’t choose to give.
Not every company will succeed, and I don’t have a clean answer on who the winners should be. But the question neither side is answering properly is how much does a company has to prove before it gets a production contract, and who gets to decide that.
Questions from the chart
Why are so many companies clustered around $1B raised, yet range from almost nothing to hundreds of millions in obligations?
What got the 8 companies across the $1-to-$1 line?
Are the companies that have been obligated more than they’ve raised underfunded, or just more capital-efficient, and why aren’t investors chasing them?
Where would the rest of the field, beyond SVDG’s top 100, land on this chart?
As always, your feedback shapes our coverage—reply directly with insights or questions.
1 The views expressed in this newsletter are my own and do not represent the views of the U.S. Navy, Department of Defense, or any government agency. Mention of companies, technologies, or products is not an endorsement or recommendation. The content is for informational purposes only and should not be considered investment advice.
2 Excludes OpenAI, Blue Origin, Databricks, Scale AI and Oura, whose funding is either overwhelmingly commercial or doesn’t reflect venture capital going into the company.
