Most people on this side of the VC community are aware of the rise of VC investment into the defence space over the last few years, and we all know that there are advantages to defence tech start-ups choosing to go the VC route to put that ‘funding rubber’ to the road more quickly than relying on government contracts. However, comparatively little has been said about Corporate Venture Capital (CVC) funding into the world of defence tech start-ups. Likewise, comparatively little has been said about what CVC investors have done to rectify their approach since the dot com boom – and subsequent crash – of the late 90s, during which CVCs gained the reputation for neglecting their investments, resulting in the label ‘dumb money’. Here at JF Ventures, we’re anything but ‘dumb money’. Here’s why:

Our companies are already experts.

Our existing defence product line, focused on the unique maritime defence space, can help develop investee efforts through channel-partnering - not mere transactional investment - particularly when those efforts create obvious synergies within our defence and dual-use product lines in energy and maritime transport. Additionally, having such an established portfolio within our existing corporate verticals provides us with the ability to take the long view on investments, while also helping to take advantage of potential short-term wins.

We’re in a different game.

Many defence CVC and VC activities are currently focused in aerospace, hypersonic, and enhanced soldier tech, while relatively few are seeking to make investments in developing surface and subsea dominance technologies. Additionally, our dual-use approach provides more than one potential opportunity to find internal synergies – hence opportunities for development - across our other verticals, generating exposure to offshore renewables, oil and gas, and shipping. While we’re not actively seeking unicorns, we are seeking to identify over-the-horizon potential disruptors who require guidance in moving beyond legacy thinking, and we understand pay-back can come in many forms, including ‘return on innovation’ rather than return on investment.

We’re global.

Our parent company operates globally; we too think globally in terms of the potential investments we are able to explore. While Silicon Valley CVC investing has its value and preferred areas of focus, we prefer to face outward, looking for different, unique challenges in a rapidly changing world with a great powers competition already in flux. And unlike many other CVC investors in defence, we prefer to allow investees as much decision space as possible, choosing not to ‘bear-hug’ but simply to offer global routes to market for those who see advantage in pursuing them. This approach allows our deals to be more strongly aligned with our strategy and makes them generally less complicated than is often the case with pure investment.