Dominion Dynamics Emerges as Canadian Defense 'Neoprime' with $21M Funding

Canadian defence technology startup Dominion Dynamics is quickly gaining momentum seven months after its launch, with a suite of prominent investors and Arctic trials fuelling its rapid growth. Dominion has raised $21-million in seed funding led by Toronto venture-capital firm Georgian Partners and including pension manager British Columbia Investment Management Corporation. Several Canadian tech leaders also invested including co-founders of Cohere Inc., Aidan Gomez and Ivan Zhang; Shopify head of engineering Farhan Thawar and former Shopify SHOP-T executive Dan Debow, a prolific angel investor; and podcaster Shane Parrish. Bessemer Venture Partners, a leading U.S. venture-capital firm that was an early backer of Shopify, also participated. Dominion plans to rapidly add to its 20-person staff, open an office in Toronto and a 25,000-square-foot factory in Ottawa, where it will develop and manufacture the sensor nodes at the heart of its flagship product, AuraNet. These sensors are deployable as a network, designed to collect and communicate data, such as video, images or voice notes, and detect threats in the Canadian Arctic. Ottawa-based Dominion Dynamics launches to build Canadian Arctic sensor network Dominion has generated a lot of buzz since its creation by Eliot Pence, a Canadian-born former executive with Anduril, a private U.S. defence tech company that is valued at US$30.5-billion. Mr. Pence is “an ambitious, accomplished Canadian who wanted to come home to build our country,” Mr. Debow said. “It’s been a privilege to help him in his mission.” The investment from Georgian, Canada’s largest venture-capital firm, is also notable as it’s the financier’s first foray into defence. It’s one of a handful of smaller investments that Georgian, which typically backs more-established software companies, has made in earlier-stage companies through its Pathfinder program. Other Canadian companies that Georgian has backed through this program include quantum-computer developer Xanadu Quantum Technologies Inc. and AI chipmaker Tenstorrent. Margaret Wu, lead investor at Georgian, said her company hadn’t considered investing in defence tech until the sector began gaining momentum last year, particularly in Canada. Of particular interest to Ms. Wu are “neoprimes,” major defence tech startups that have focused on emerging-technologies platforms, challenging traditional prime contractors such as Boeing BA-N, General Dynamics GD-N or Lockheed Martin LMT-N. “You can clearly see that Dominion is going after this platform, neoprime play, which provides a spectrum of potential technologies that we will encounter being part of this company,” Ms. Wu said in an interview. “You pair that with Eliot’s experience doing this before at one of the defining startups of its generation, Anduril, and I think there’s a lot to be excited about here.” Ottawa aims to improve Arctic communications with new defence agency’s first procurement Dominion’s focus on the North is an intentional response to a call to action by Prime Minister Mark Carney to boost Canada’s presence and surveillance in the Arctic, which accounts for 40 per cent of the country’s land mass and 75 per cent of its coastline. For decades, the government has underinvested in infrastructure and military personnel in the region, while foreign-vessel traffic has increased dramatically through Canada’s Arctic waters. Mr. Carney hopes to change that. Dominion is working toward securing a contract with the federal government for its Arctic systems. Until then, it’s providing its technology for free to military members living and working in the north to encourage adoption and gather feedback. In October, Dominion completed a trial of AuraNet with the Canadian Rangers, a part of the Canadian Forces reserves who work in rural or isolated regions such as the Arctic. In February, it will deploy AuraNet with the Forces to be used during Operation NANOOK, a series of annual military activities conducted in the Arctic. Dominion will also work this year with the Canadian Navy for a trial of Ice Spike, an ice-penetrating sensor that connects maritime autonomous systems with its AuraNet nodes above water. Dominion is self-funding the field tests for now and expects to do 10 to 12 voluntary deployments with the Forces before the company vies for a contract, Mr. Pence said. “Our approach has been, don’t try to sell right away. Don’t try to get a contract right away,” he said. “Build things that matter, that we know the CAF needs, deploy them as soon as possible with them, get their feedback, and then re-engineer the products to fit that feedback.” This way, he said the company can build trust with end users and gain advocates within government when it vies for Department of Defence contracts. Opinion: Zip up, Canada: It’s time to build a wartime economy in the North It’s an approach that enables Dominion to not rely solely on government programs such as Innovation for Defence Excellence and Security (IDEaS) or Innovative Solutions Canada, which Mr. Pence said he’s wary of because of their lack of a clear pathway to government contracts. Successful neoprimes, such as Anduril, Palantir and SpaceX, have taken a similar approach, he added. It’s a calculated risk to get out of the long process of waiting for government decisions by securing quicker access to a user so “they can articulate their problems and then we can build a solution,” Mr. Pence said. Aside from AuraNet and Ice Spike, Mr. Pence said Dominion is working on a drone called Dominion Scout that it will manufacture in Ottawa. The autonomous aircraft is being designed to operate as part of a swarm that can collaborate on tasks, pair with fifth-generation fighter jets, such as the F-35, and extend AuraNet as an airborne network. Erin O’Toole, former Conservative Party leader and chair of Dominion’s advisory board, said given how lacking Canada is in Arctic domain awareness, Ottawa should value Dominion as a Buy Canadian solution. “What Dominion’s doing is really important, but what the government has to do is equally as important. “I know that bureaucrats don’t think we can supply a lot of this stuff ourselves, but we’ve never actually given industry much of a chance to do it.”