Is This The Southeast's Defense Tech Moment?
ATLANTA, October 14 (Hypepotamus) - Military drone testing sites in the Wiregrass region of Alabama. Drone defense technology being built in Midtown Atlanta. Aerial robotics companies popping up across Rocket City.
It’s hard to talk about the Southeast’s tech scene right now without talking about its Defense Tech industry. The topic was central at panel discussions at Sloss Tech in Birmingham and 3686 in Nashville this year. This week, the industry will be center stage at Venture Atlanta. And, of course, there is a growing number of Defense Tech-related startups getting the attention of VCs around the country.
The Southeast’s Defense Tech scene is taking shape around problems that reach beyond the battlefield. Startups are working on technology for protecting infrastructure, strengthening domestic supply chains, making sense of increasingly complex data, as well as helping stop domestic and international threats.
These businesses could create new paths for engineers, manufacturers, and investors to turn the Southeast’s longstanding industrial strengths into locally-grown success stories.
So what’s behind this Defense Tech boom? We asked local executives to get a better clue.
The Southeast’s DeepTech Roots
Defense Tech can include software, sensors, autonomous systems, advanced materials, and manufacturing tools, and can include everything from companies building foundation AI models, edge AI, semiconductors, quantum, SpaceTech, robotics, and advanced manufacturing.
Many of those businesses overlap with Deep Tech, where scientific and engineering advances underpin the product.
Huntsville’s space and rocket industry anchor an economy built around complex engineering and federal technology programs that has helped spur a new Defense Tech hub. Alabama, North Carolina, Florida, and Georgia’s military outposts support missions spanning aviation, cyber, intelligence, and logistics. Those institutions helped build up the local workforce and supplier base that emerging Defense Tech companies can draw from.
Maija Ehlinger
And in a world where software is cheap (and potentially less defensible), it makes sense why investors and founders are flocking to build hardware, Deep Tech, and ultimately Defense Tech-focused companies.
When looking at the overall Deep Tech world, the region has several distinct advantages for founders looking to get a foot in the door (or a satellite into space). Stef Crum of Reditus Space said that Atlanta was the right place to build his DeepTech, SpaceTech startup because of its “large industrial aerospace base,” and because the city “has a lot of experience in building hypersonic systems, as well as its proximity to our most relevant stakeholders.”
Maija Ehlinger
The region has also attracted out-of-town aerospace companies. JetZero broke ground in June on its first manufacturing and final assembly campus in Greensboro, North Carolina. The company is developing commercial aircraft as well as military variants, including refueling and transport aircraft.
“North Carolina stands out in the Southeast as a state that has aligned government, universities, business, and community to attract innovative companies like JetZero,” said Sonny Stern, Head of Customer Support at JetZero.
What Local Companies Are Building
The Southeast’s aerospace and SpaceTech industries helped lay the groundwork for this next generation of Defense Tech startups we are seeing.
In 2021, Defense Tech giant Anduril acquired Marietta-based unmanned aircraft developer Area-I, bringing its ALTIUS technology into Anduril’s portfolio. Today, the Metro Atlanta area is home to startups like Askari Defense, which is developing low-cost drone interceptors. An idea born from Georgia Tech grads, Askari is backed by several Southeast investors and is rapidly hiring engineers.
Maija Ehlinger
The region is also home to Defense Tech companies like:
Lykos Industries (Atlanta): builds ultra-high-performance materials and manufacturing infrastructure for defense, aerospace, and advanced computing systems.
Pyrrhus Aero (Atlanta): Military and infantry technology
Danti (Atlanta): Searchable earth data platform with military and governmental use cases
Skyfire AI (Huntsville): Helps public safety groups, defense industry players, and other mission-critical organizations that need to respond faste
Walaris (Marietta): Autonomous C-UAS surveillance systems for drone threat detection
Rownd (Research Triangle Park): Economical, autonomous drones
Splash One Robotics (Atlanta): Building the fighter drone ecosystem
Eonix Energy (Knoxville): Building safer batteries for the defense industry
HyperTunnel (Marietta): Mixed-reality solutions designed to deliver mission-critical support for USAF maintenance operations.
Outpost Technologies (Huntsville): Provides engineering, test, and manufacturing solutions for complex defense, space, and mission-critical systems
What Founders Are Saying
Asked to describe the Southeast’s Defense Tech industry, Jake Kaempf of Lykos Industries offered one word: “Inevitable.”
He points to the region’s engineering institutions, research capabilities, manufacturing heritage, and business environment. But he also sees a gap between having those assets and operating as a connected startup community.
“I would say we need a greater sense of shared identity within defense and deep tech,” Kaempf told Hypepotamus.
This week’s Venture Atlanta programming has a strong focus on Defense Tech. Not only are nine defense-related startups taking to the stage to pitch in front of investors, but there is an entire afternoon dedicated to Defense Tech conversations happening at the conference. (Details here and on the Venture Atlanta schedule).
What Investors Are Saying
Todd Ehrlich of Rule 1 Ventures, a Defense Tech and aerospace investor in Atlanta, says that the industry's momentum comes from the fact that it is "less risky" in many ways than AI.
"The Southeast sits in an interesting space related to the defense tech and we expect to see a lot of growth here from domestic and foreign defense tech companies. We have a few things that are hard to find elsewhere, manufacturing capability and talent, engineering talent, and if you include Texas in the Southeast we have the presence of 45% of the DoW [Department of War] personnel and facilities. Since most successful defense tech these days is focused on hardware there is a cost advantage to be in the [Southeast], with cost of living and [real estate] considerations," he added. "We are very bullish on the SE. On top of all that you have deep investment in research by the DoW at Georgia Tech and GTRI and we expect that to continue, and should spawn meaningful investment opportunities for decades. Holding us back is really only capital. We don’t have enough capital locally, once we can establish that the SE/Atlanta is a defense tech super hub, the capital will come."
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Featured Photo by Dose Media / Unsplash
