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Since 2018, Costanoa has been quietly working with founders building companies that serve and protect National Security. Auterion helps defend Ukraine through centralized drone operations. Vannevar Labs, which incubated in our Palo Alto office after we co-led their Seed, helps national security teams apply mission-critical data insights at much faster rates using ML and AI. Cape, Kepler Communications, Muon Space and several yet-to-be-announced investments are also working in and around these areas. Having been more action than talk (or, better yet, more cattle than hat) until now, we wanted to share more about our interest and thesis in National Security. We believe that the mission is critical and the sector is ripe for the kind of transformation that startups can create.
We often say that there are two kinds of innovation: customer in and technology out. On technology out, the innovations of the past decade (initially in machine learning, then in smaller satellites in low earth orbit (LEO), and now in foundation models and LLMs) let people solve problems that previously couldn’t be solved. At the same time, on customer-in, these new tools have unleashed new threats as terrorists, hackers and nation states use them to sow chaos.
The past few years’ events have shown that agents of chaos are alive and well, and that they mean us harm. As a result, the US defense and intelligence community now acknowledges the need to transform its innovation cycles and procurement processes. That’s why we think we can make a substantial contribution to national security technology that also offers significant commercial opportunity.
Investing in the Future of Satellite Defense: Why It’s Important
Your map apps, your TV signal, your Uber – how many services do you use everyday that rely on space? All of them could be disabled in a blink with one offensive move by a malign actor.
Satellites are not only essential for military operations, intelligence gathering, and global communications, but they also represent critical national infrastructure. The increasing weaponization of space and the offensive capabilities being developed by global powers make defending these assets a top priority.
Space experts have emphasized that the window for effective defense is narrow. Modeling and simulation demonstrate that, once kinetic action occurs in space, the damage is swift and often irreparable. A kinetic war in space could last as little as 24 to 48 hours, experts assert. During this time, an adversary’s first strike could disable critical satellite systems, leaving significant gaps in communication, intelligence, and missile warning networks, let alone the disruption of our daily lives.
The Criticality of “Left of Kinetic Action” Technologies
At Costanoa, we believe the best way to enable space defense is to invest in capabilities that operate “left of kinetic action”—before a physical attack occurs. The time to deter and neutralize a threat is before a missile is launched or a satellite is attacked. So we see significant opportunities for innovation and investment in technologies that identify, deter, and mitigate risks in the early stages, especially in Space Domain Awareness (SDA), Cybersecurity, and Satellite Communications (SATCOM), which all bridge both military and commercial needs:
- Space Domain Awareness: SDA is critical to maintaining control and operational superiority in space, providing real-time tracking of satellites, debris, and potential adversaries. SDA not only contributes to the protection of military satellites but also the infrastructure that powers Global Positioning Services (GPS), communication networks, and weather systems that people rely on daily. Without effective SDA, disruptions could lead to widespread outages affecting everything from navigation apps to essential logistics services.
To enhance SDA, there should be a focus on expanding sensor capabilities and improving data processing with AI/ML integration. This will allow for faster and more precise analysis of the increasing volumes of space data, ensuring decision-makers can respond swiftly to emerging threats. Augmenting sensor networks and developing systems that can work seamlessly with AI-driven analytics will sharpen threat detection, making SDA indispensable for preempting and preventing conflicts in space.
- Cybersecurity: Cybersecurity is absolutely critical in space defense, especially as the vulnerability of space systems to cyberattacks grows with greater interconnectivity. Protecting these systems from intrusions and disruptions ensures that critical communication networks continue to function. Additionally, defensive cyber operations safeguards satellites that enable global communications, financial transactions, and critical data flows. A cyberattack on space assets could cripple the technologies that underpin everyday life, from mobile networks to stock exchanges, making cybersecurity essential for preserving modern infrastructure.
Strengthening cyber defenses across satellites, ground stations, and data links strengthens the integrity of space-based operations, safeguarding national security against non-kinetic threats like cyber intrusions and electronic warfare.
- Satellite Communications: SATCOM is essential for real-time communications, intelligence sharing, and military operations. It is also crucial for transmitting Space Domain Awareness (SDA) data through the SDA Transport Layer. Without reliable SATCOM, even advanced SDA systems would be ineffective, as actionable insights require that real-time data is securely transmitted to command centers. This makes SATCOM vital for supporting command, control functions, and timely intelligence delivery in space operations. For the commercial sector, SATCOM provides the backbone for global internet, television broadcasting, and emergency services. If SATCOM systems are compromised, it could disrupt everything from disaster response to everyday internet access, highlighting the crucial role they play in both military and civilian life.
The growing demands of modern space defense require advancements in Optical Inter-Satellite Links (OISL) and quantum communications. These technologies reduce latency, boost bandwidth, and enhance security, making them resilient against jamming and interference. As SATCOM networks become more critical in contested environments, the development of these technologies is essential for maintaining uninterrupted and secure communications, ensuring the effectiveness of both military and commercial operations.
The Founders We Look For in Defense Tech and Space
We believe that the success of any startup hinges on the strength of its founding team, including their deep domain expertise, grit, and resilience. We prioritize teams that show a strong drive to overcome challenges who can deliver cutting-edge solutions in environments where resilience and adaptability are key.
In the defense and space sectors, we also look for founders who demonstrate a deep commitment to supporting national security through defense technology.Their passion for leveraging their innovations to protect and advance critical national interests enable them to lead in this rapidly evolving field.
Space and defense tech founders also need to do one other thing that most founders don’t: navigate both commercial markets and the complexities of DoD acquisition processes. Founders who can combine technical excellence with the ability to work within government frameworks are uniquely equipped to succeed.
Why Costanoa
Costanoa helps space and defense tech companies succeed through hands-on involvement and a deep understanding of dual-use technologies that address both the commercial and defense markets. Since 2018, we’ve worked side-by-side with companies serving national security markets that have given us invaluable insights into navigating the complex DoD procurement process and building dual-use technologies. The expertise we’ve gained comes from getting in the trenches with our founders, helping them bridge the gap between government contracts and commercial scalability, not just offering capital but providing strategic guidance every step of the way.
Our work with dual-use companies like Muon Space and Kepler Communications has further shaped our expertise in helping companies balance military and commercial applications. Both companies have pioneered technologies that meet the stringent requirements of the defense sector while capturing significant opportunities in the commercial market. Through these partnerships, we’ve refined our understanding of how to scale businesses that serve multiple sectors, ensuring their technologies meet the evolving needs of both government and commercial customers.
Our diverse expertise in Fintech, Cybersecurity, and AI-enabled SaaS also helps us separate problems unique to defense from those that are just “normal” startup challenges. This lets us right-size our support so that, when we roll up our sleeves, our help is actually helpful.
What’s Your Idea?
We are always excited to explore new ideas that push the boundaries of space and defense technology. If you have an innovative idea, we would love to hear from you.
Please contact Greg Sands, John Cowgill, or Michael Parker to explore how we can work together to shape the future of space defense.
About the Authors:
Greg Sands is Costanoa’s Founder and Managing Partner. Chris Gramling is a U.S. Army Space Officer and a 2nd year MBA student at Stanford's Graduate School of Business. Michael Parker is an Associate at Costanoa and comes from a military family.
Note: The views and opinions expressed in this blog are those of the authors and Costanoa Ventures, and do not represent those of the U.S. government, the Department of Defense, or any other governmental agency.
