Mach Industries, a Huntington Beach, California-based defense technology startup, secured $185 million in venture funding as of late 2024, signaling a significant shift in investment towards the sector, according to reporting from the Los Angeles Times. The funding allows the company to expand its manufacturing capabilities in Southern California, drawing on the region’s established aerospace and defense workforce.
The influx of capital into defense tech firms like Mach Industries reflects a broader trend of Silicon Valley venture capital firms and established tech companies reversing decades of reluctance towards military contracts. This pivot is occurring against a backdrop of rising geopolitical tensions, particularly with China, and a perceived need to modernize U.S. National security capabilities. Los Angeles-area defense tech funding surged to $4 billion in 2025, more than double the total from the previous year.
This surge in investment is not limited to Southern California. Nationwide, venture funding for U.S.-based defense tech startups totaled approximately $38 billion through the first half of 2025, potentially exceeding the 2021 peak, according to JPMorgan. This influx of funds is attracting what industry insiders are calling “neoprimes”—companies challenging the traditional dominance of established defense contractors like Lockheed Martin, Boeing, and RTX. Jameson Darby, co-founder of investment syndicate MilVet Angels, noted that “there’s more money than ever going to what we call the ‘neoprimes’,” though it remains a fraction of the overall defense budget.
Anduril Industries and Palantir Technologies are frequently cited as examples of these neoprimes, characterized by their speed, agility, and software-first approach. These companies are focused on developing technologies that can address critical gaps in national security, often with applications in both military and commercial sectors – a characteristic described as “dual-use” technology. The Silicon Valley Defense Group (SVDG) highlighted the importance of adopting these innovations in its 2025 NatSec100 report, emphasizing the need to move beyond invention and focus on practical implementation.
However, the rapid growth of these Silicon Valley-backed defense firms is not without its challenges. A recent report from Reuters indicates that these companies are facing “growing pains” as they attempt to transition from startups to established defense contractors, navigating the complexities of Pentagon procurement processes and scaling up production to meet demand. The report suggests that while these firms have roughly doubled their share of Pentagon contracts in the past year, sustaining that growth will require overcoming significant operational hurdles.
Mach Industries is currently developing stratospheric weapons and vertical-takeoff missiles, including a weapon capable of delivering a precision strike from thousands of miles away without relying on GPS. Another system under development is a vertical-takeoff cruise missile with the accuracy of a helicopter-launched rocket, capable of striking targets from a range of at least 180 miles. These developments have garnered significant interest from the Department of Defense.
The SVDG’s 2025 NatSec100 report recommends prioritizing innovation adoption, engaging public markets to facilitate growth, sending stronger technology demand signals to capital markets, and deepening coordination with allied innovation ecosystems. The report similarly notes a need to reduce the gap between private and public investment in emerging technology companies.
