Y Combinator Leaps Into Defense Tech With Missile Company Investment

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Defense Tech,Y Combinator,Ares

I'm a senior writer at Forbes covering AI, defense and national security. I'm also the co-author of WONDER BOY: Tony Hsieh, Zappos and the Myth of Happiness in Silicon Valley, published by Henry Holt & Company. Contact me on Twitter at @davidjeans2 or email me at djeans@forbes.com. You can also send tips on Signal +1 347 559 5443.

YC’s bet on Ares, which hopes to make anti-ship missiles smaller and cheaper than current ones, is the latest example of Silicon Valley courting the Pentagon with defense innovations.Y Combinator, the startup incubator, has long been synonymous with Silicon Valley software companies that have digitized society: Airbnb for vacations, Reddit for sharing news and information, Stripe for payments.

But wars in Ukraine and the Middle East, growing tensions with China, and the rise of venture-backed weapons companies like Anduril have helped usher Y Combinator’s entry into the defense space — the latest sign of a seismic shift. “The reason that we didn't fund defense tech companies before was not because Y Combinator had some sort of change of heart,” said Friedman, who cofounded digital document company Scribd before joining Y Combinator. “It's because the founders did.

There have been misfires, too. Mach Industries, which raised more than $80 million from blue-chip investors like Bedrock Capital and Sequoia, ran afoul of production mishaps and safety failures — including one incident that was almost fatal, as previouslythe company said in May it was now making a cruise missile that “will accomplish its role for less than 25% of the cost” of current products.

Tseng, who previously worked on carmaker Rivian’s self-driving team, and once studied turbo jet engines at Carnegie Mellon, met his cofounder Devan Plantamura at an anti-tank missile startup called Longinus. But the company shuttered after a few months, running out of money last year. “We struggled to raise…because the venture capital community really struggled to put their investment there,” said Plantamura, a U.S. Navy veteran who also worked at Mach Industries.

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