Everything You Want in Tech, but Better

By: July 3, 2024

Think of military tech as the same kind of gear that you would want at your home or office, but built much tougher and far more secure.

For example, FLIR, now part of Teledyne (NYSE: TDY), was a company that specialized in Forward Looking InfraRed cameras. After 9/11 happened and the ensuing conflicts in Afghanistan and Iraq, drones were deployed in great numbers. FLIR’s cameras were on a lot of them.

Plus, this type of camera is great for seeing at night and through clouds, rain, and fog.

It wasn’t long before FLIR launched a commercial division to supply its mil-spec equipment to security firms, maritime retailers, and first responders. Now, even homeowners and HVAC firms are using it!

 Source: InterNACHI Forum

Palantir (NYSE: PLTR) is another company that started with next generation facial recognition technology that was inking deals with intelligence and homeland security agencies for years.

Since then, PLTR has made its name across the military and now is used by law enforcement and even some industrial applications as the company “demilitarized” its unique technology for civilian use.

Source: Palantir

The Military Advantage

What many VCs and PEs are catching onto is the fact that you can find a niche to get a new tech firm involved and the government will pay for R&D. Then, the companies get rock-solid contracts to scale up, and from there the investors can find a transition to commercial success with a profitable company with a proven tech.

The trick is to find these second and third tier companies that can make the transition from defense work to civilian work, but they’re many. TDY, PLTR, AeroVironment (NASDAQ: AVAV), and many others have made this move.

There are more to come. The small rocket company Rocket Lab (NASDAQ: RKLB) just had its 50th successful launch of small satellites. There are also space launch companies, like Firefly Aerospace, Relativity Space, Bellatrix, as well as SpaceX and Blue Origin, that are well respected names that have yet to go public.

These sectors are just the tip of the iceberg. Next gen laser communications companies are ramping up and blending AI and robotics. These all will be world-changing technologies when they’re spun off to civilian purposes, but it’s possible to grab a stake in some of these companies before they start their launch sequence.

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