Tension Brews in Defense Tech

It’s not every day that you see a company like Anduril, a 2,200-person defense technology company last valued at $8.5 billion, sue a 6-person startup with just $4 million in venture backing. But, as my colleague Margaux and I reported this week, Anduril CEO Palmer Luckey is going after a much smaller upstart founded by his former employees, Salient Notion. Anduril alleges Salient stole trade secrets and breached employee contracts, which the startup denies. 

The episode offered a rare view into some of the new tensions brewing in the defense tech sector during a period when more entrepreneurs are launching startups and generalist VC firms, such as Sequoia Capital, wade into the sector. The cluster of investors with longer roots in defense are worried about FOMO-driven investing that can drive valuations too high. Still, the sudden influx of new capital is great news for defense startups, which have yearned for mainstream investor interest.