Dominion Dynamics Inc. has secured a record-breaking $139 million Series A fundraise, the largest in Canadian defence history, with backing from major institutional investors including OMERS Administration Corp., Business Development Bank of Canada (BDC), and Deloitte Ventures Canada. The round was led by Toronto’s Georgian Capital Partners Corp.
Record Fundraise Signals Investor Confidence
The Ottawa-based startup announced the financing on Tuesday. Founder and CEO Eliot Pence said the participation of Canadian investors shows they now understand the “criticality of defence” and the crucial role that technology plays. “It’s a recognition that capital is ready and willing to participate,” he added.
Despite this milestone, Pence noted that Canadian defence tech startups and small and mid-sized businesses (SMBs) are still in a “liminal state” as they await procurement reform promised by the federal government via the newly established Defence Investment Agency (DIA). “We have yet to emerge on the other side of that,” he said. “We need to move at the pace of the threat and we’re not there yet. Other countries have definitely moved faster.”
Challenges in Securing Government Contracts
Dominion’s top priority is securing a contract with the Canadian Armed Forces (CAF), but the company has faced difficulties in accessing and testing its technology with the military. “Every good defence technology is co-developed by industry. What we’re looking for next is increasing the feedback and iteration cycles directly with the Canadian military,” Pence said. “And for a venture-backed company, you think about your life in terms of weeks, (not) months or years.”
Homegrown SMBs and startups face high barriers to entry in defence, including complex procurement and regulatory requirements, security clearances, and fundraising challenges, according to a BDC report from June. These hurdles put them at a disadvantage compared to larger, established defence primes.
Funds to Develop Arctic Technologies
Dominion will use the fresh capital to continue developing its flagship products designed for the Canadian Arctic: AuraNet, a software communications and monitoring platform, and Scout, an autonomous collaborative platform for drones that fly alongside crewed fighter jets. The Canadian Rangers, a unit of the Canadian Army Reserve, recently tested Dominion’s software platform in the Arctic, providing feedback that allowed the company to make fixes on the go.
“The core capability that we bring to the table is velocity,” Pence said. “We are able to build, deploy, test and harden a product in the course of hours and days.”
Expansion Plans
The fundraise will also support Dominion’s expansion. The company is hiring additional technical talent and expects to increase its headcount to 100 or 200 by year-end, depending on how quickly it can secure government contracts. Pence emphasized the urgency of moving at the pace of the threat, noting that other countries have moved faster in defence technology adoption.
