In a landmark deal for Canada's burgeoning defence technology sector, Ottawa-based startup Dominion Dynamics Inc. has closed a $21 million funding round, marking the largest early-stage fundraise of its kind in the country. The investment highlights a significant surge in capital flowing towards defence and dual-use technologies.
Strategic Backing for Arctic and Aerial Innovation
The funding round was spearheaded by Toronto's Georgian Partners Growth LP, a firm specializing in high-growth enterprise software. A notable participant was the British Columbia Investment Management Corp. (BCI), the pension fund manager for British Columbia's public sector. Other investors included Deer Management Co. LLC (the holding company for Bessemer Venture Partners) and several angel investors.
Dominion Dynamics is focused on developing advanced sensing systems designed for operations in the challenging Arctic environment, serving both military and civilian needs. The fresh capital will accelerate the deployment of its sensing network, expand its Canadian operations, and advance the development of its proprietary drone technology. These drones are engineered to operate collaboratively with fifth-generation fighter jets, such as the F-35.
"The Future of Every Air Force"
Eliot Pence, founder and CEO of Dominion Dynamics, articulated the company's vision, stating that integrating manned aircraft with unmanned autonomous vehicles like drones is critical for the future of air power. "This is critical for our ability to project power across the Arctic," Pence emphasized. The company is actively building a simulated environment to test this concept against various threat scenarios, with a prototype targeted for completion in the coming months.
Field trials for its sensing software have already been conducted successfully in northern Ontario, with current testing underway in the Yukon. To support its rapid growth, Dominion Dynamics plans to triple its headcount to 75 employees this year. It has recently opened a development office in Toronto, maintains a lab in Kingston, Ont., and has signed a lease for a 25,000-square-foot factory in Kanata, Ont., set to open in March 2026.
A Sector Transformed by Software and Geopolitics
Margo Wu, lead investor at Georgian Partners, framed the investment as a bet on the modern transformation of defence. "Defence is no longer just about hardware; it is about software, data and speed," Wu said. "In our view, Dominion Dynamics represents the future of the Canadian ecosystem: deep tech, dual use and mission critical."
This record fundraise occurs against a backdrop of rising global tensions and significant advancements in deep tech like artificial intelligence and quantum computing. These factors have catalyzed an investment boom in a sector once considered taboo by many Silicon Valley venture capitalists. According to Crunchbase Inc. data, global funding for VC-backed defence startups reached a record US$7.7 billion in 2025.
The Canadian government is also bolstering the sector, having promised $6.6 billion over five years for defence spending and preparing to release a Defence Industrial Strategy. Earlier this month, it announced over $240 million to support small and mid-sized businesses developing dual-use technologies, further validating the strategic shift towards innovation in national security.
