Palmer Luckey’s Anduril leads second quarter surge for venture capital in greater L.A.

by

Investments in venture capital for businesses in the Greater Los Angeles area significantly increased to approximately $5.8 billion during the second quarter of this year, compared to the same period last year. This surge in funding can be attributed to investors channeling their resources into defense technology and aerospace companies within the region, as geopolitical conflicts heighten worldwide.

In the recent quarter, Anduril, a defense technology company headquartered in Costa Mesa, garnered the largest venture capital investment among regional companies. This was achieved through a $2.5 billion funding round, as reported by research firm CB Insights.

The business established by innovator Palmer Luckey announced plans to employ the funds for expanding manufacturing, staff recruitment, making bold moves on product development and enhancements, as well as strategic mergers and acquisitions.

As a movie critic, I’d pen it down as: “I’ve just learned that Anduril, a company specializing in autonomous weapons systems, has secured a whopping $99.6-million contract from the U.S. Army to develop a cutting-edge command and control prototype. This system is touted to revolutionize battlefield communications. With over 6,000 employees on board and a staggering valuation of $30.5 billion, Anduril is certainly making its mark in the defense industry.

In June, during an interview on Bloomberg TV, Trae Stephens, partner at Founders Fund and executive chairman of Anduril, announced that their firm had made their largest investment to date – a $1-billion contribution – as the lead investor in a recent funding round.

L.A. Influential

The founder of Anduril, Palmer Luckey – who is known as a protege of Peter Thiel – is spearheading a significant surge in defense technology in Southern California, with substantial financial backing derived from his initial venture.

The latest funding event at the company underscores robust investor enthusiasm towards defense technology and aerospace industries, as venture capitalists foresee these sectors to be prime candidates for innovation-driven transformation. They anticipate that startups will capture significant market share from established players like Lockheed Martin and Northrop Grumman in this process.

Worldwide, investments in defense technology by venture capital are increasing significantly. As per CB Insights, these investments have already surpassed last year’s amount. For the first half of 2025, investors have put $11.1 billion into defense tech companies through venture capital, which is more than the entire $8.2 billion invested in 2024, according to CB Insights’ report.

As a movie buff with an eye for investment opportunities, I’m finding myself drawn to sectors that enjoy strong backing from the government, given the current global climate. With defense and geopolitics taking center stage in the U.S., it seems like a wise move to explore these areas. The world is experiencing a surge of international conflicts, such as Russia’s prolonged conflict with Ukraine and Israel’s ongoing struggle against Hamas in Gaza. It’s an unsettling time, but also a period of potential growth for those who are strategic about their investments.

Jason Saltzman, head of insights at CB Insights, stated that we’re stepping into a phase characterized by administration, regulation, and a global political landscape where security is a top concern. There’s growing interest in defense technology, with more government backing and investors jumping on the defense tech bandwagon.

In simpler terms, Southern California, known for its aerospace and defense technology sector, is drawing attention from investors. The region’s firms make up no less than nine of the top 30 global private companies in defense technology that have received the highest amounts of venture capital funding, as reported by CB Insights.

Companies located in the South California region are drawn by the area’s robust talent base, which includes prestigious educational institutions such as Caltech and USC’s Viterbi School of Engineering.

During the eras of World War II and the Cold War, major defense contractors such as Northrop Grumman and Hughes emerged in the South Bay region. This area became vitally important for both the defense and aerospace sectors, according to Professor Dan Wadhwani, who leads the Lloyd Greif Center for Entrepreneurial Studies at the USC Marshall School of Business. As new tech startups develop innovative technologies, they will need to seamlessly combine these advancements with existing systems, he noted.

He noted that being close to major defense sector stakeholders positions Los Angeles as an excellent location for taking advantage of the increasing tendency toward increased defense expenditure.

Business

144 business transactions worth approximately $3.1 billion were financed by venture capitalists and private equity groups in the Los Angeles region during the first three months of this year, representing a 15% increase compared to the same period last year.

Over the last three months, I’ve been captivated by the surge of investments in the defense technology and aerospace sectors. Leading the charge was Anduril, with Impulse Space from Redondo Beach close behind, having secured an impressive $300 million. Not too far behind, Chaos Industries based in Hawthorne raised an impressive $275 million, while L.A.’s own spacecraft manufacturer Apex added $200 million to their coffers, as reported by CB Insights.

Chaos Industries manufactures sensors and radars for detecting and tracking unmanned drones, missiles, and aircraft. Established in 2022, this business has grown to employ over a hundred people and has secured $490 million in funding since its inception. This investment will be used to expand the workforce and enhance production capabilities, as announced by Chief Strategy Officer Will Hurd.

According to Hurd, he recalls his time at an investment bank in 2021 when investors showed no interest in funding businesses whose main client was the government due to apprehension or lack of knowledge about how that relationship functioned. However, this trend has shifted and transformed over time, giving rise to a surge of defense technology and aerospace companies, among them Chaos Industries.

“Now the adversaries have gotten more sophisticated, and we have to match that,” Hurd said.

Impulse Space, a firm specializing in spacecraft manufacturing, announced a significant increase in customer interest. They revealed they have over 30 signed agreements, both governmental and commercial, valued at approximately $200 million collectively. The fresh venture capital investment will be allocated towards expanding the workforce, increasing production rates, and speeding up research and development efforts.

According to CEO and founder Tom Mueller, we’ve demonstrated our ability to construct swift machines that fly effectively. Now, the market is expressing a need for even more.

Read More

2025-07-30 00:31