Space race heats up
Canada’s space industry wants $7.5B in defence dollars
🎯 Three-Shot Burst
Canada’s space industry is jockeying for a chunk of the federal government’s defence dollars, selling itself as a sector that’s critical to national security and, quite possibly, the first frontier for Canada in any impending conflict.
According to a new report by Royal Bank of Canada titled A Higher Orbit, this could inject $7.5-billion annually into the Canadian space sector:
The global space economy is expected to nearly triple to US$1.8-trillion by 2035, according to RBC’s report. As part of that, Canada has an opportunity to grow its domestic space industry four-fold to $21-billion in the next 10 years. But only if it can attract $12-billion in public and private capital to spur this growth, RBC writes.
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Founders will miss out on “10x” their valuation if they don’t lean into the defence trend, according to Pekka Laurila, cofounder of Finnish spacetech and dual use startup Iceye… French Rocket Builder HyPrSpace Secures €21 Million in New Funding… Quindar Raises $18M Series A to Accelerate the Next Generation of U.S. Mission Control
Canada’s new defence-procurement body represents an acknowledgement that its existing defence-procurement system cannot keep pace with current international challenges and the rate of defence-relevant technological change. It also represents a gamble
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At the Halifax International Security Forum, Republican lawmaker Sen. Thom Tillis of North Carolina says it’s all good and well that Canada is finally meeting its NATO defence spending commitments, but Canada should make up for two decades of back dues — to the tune of $300 billion
Looming military radar project creates deep anxiety for rural Ontario community:
If Ukraine is defeated, Canada risks being squeezed between two emboldened, expansionist neighbours
Stockpile: Canada has designated our critical minerals essential to national defence under the Defence Production Act. Per sections 12-14 of the Act: the sweeping powers could range from simply reports from the sector on capacity, to stockpiling and/or investment or direct ownership to secure supply
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🤝 Deal Corner
First Person POV by OnDeck AI CEO Alexander Dungate:
Singapore Is Beating Canada to Canadian Defence Tech
The Singapore military came to our living room and set a gold standard for defence tech procurement with a simple trick: open lines of communication and spot contracting.
While our team was going through Y Combinator this summer, executives from Singapore’s Defence Science and Technology Agency (DSTA) got wind of what we were building at OnDeck AI and asked if they could come by to get to know our technology and our team.
They shared their challenges over tea, tried our product on live data, murmured excitedly, then they typed up a contract right there on our dining room table. Today our collaboration has grown across several branches of the Singapore Armed Forces, and we have developed the type of relationship that I hope to see the Canadian Armed Forces build with other startups in Canada.
Singapore recognises that startups often outpace incumbents on innovation and they have developed a procurement strategy that lets them stay abreast with frontier capabilities from startups. Their approach is simple:
Open casual lines of communication with startups.
Bring budget to the table with spot contracts (signed in minutes).
Move on startup timelines (days and weeks, not months).
In Canada, the request for proposal (RFP) process effectively blocks the Armed Forces from having access to the latest capabilities from startups. While programs like IDEaS and Innovative Solutions Canada exist to help the CAF engage with innovation, unfortunately both programs still flow through rigid RFPs, run on multi-year timelines, and are misaligned from how good startups work.
Most crucially, there is no official path for members of the CAF to talk with startups to share their needs, learn about new capabilities, and mutually explore what solutions could look like for their problem space.
It takes months to years for a need in the CAF to be expressed as an RFP, then additional months to years for responses and contracting. At best, this means solutions will be a year out of date by the time they are delivered. In the age of AI, this means solutions for our Forces will be archaically out of date.
Startups outpace incumbents by obsessing over a user’s problem and moving incredibly quickly. By enabling the user engagement and speed, Singapore (along with the US), are able to capture the unique edge found in startups to give their forces superior capabilities. With the frenzy around modernizing defence procurement, I am optimistic that this may be a time for our Armed Forces to unlock the same capabilities.
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Silicon Valley’s defence-first history:
This first generation of the Valley “seeded companies that repurposed technologies built for war to everyday life,” writes Margaret O’Mara, a tech industry historian. “Today’s tech giants all contain some defence-industry DNA.”
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⚔️ Combat Readiness
Drone dominance as a proxy for techno-industrial superiority
With the rise of techno-industrial warfare and far-reaching hypersonic missiles, it is increasingly argued that strategic depth is not just confined to terrain or the geography of a map. It is the ability to achieve self-sustainment in a protracted conflict. And it is increasingly an area where allied strength is at risk.
A suitcase-sized drone slips into the airspace above a U.S. military base. Operations grind to a halt. Security forces scramble, but the damage is already done — all caused by a device that costs less than a smartwatch.
The Pentagon’s growing list of ‘made in America’ drones has a loophole for certain parts made in China. China’s emphasis on manufacturing, while perhaps not economically efficient, has also probably prepared it better for prolonged capital-intensive war:
‘China was playing chess while the rest of us were playing checkers’: Bombshell study finds $200 billion of secret loans to U.S. businesses over 25 years
The US Defense Innovation Unit (DIU) announced the selection of six companies to advance under Project G.I., Design Reference Mission 2 (DRM2) – a Prize Challenge focused on accelerating the kill chain for small, expeditious units in denied environments.
The UK MoD confirms their DragonFire laser shoots down high‑speed drones traveling at 400mph, costs $13 per shot — UK Navy to begin deploying system on destroyers.
Meanwhile on our side of the border:
Here’s what DARPA is actively funding inside the U.S. SBIR program.
Related:
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Dogfight: Canada is shopping for new fighter jets—and on the verge of making a disastrous decision… Sweden offers Canada a chance to revive its near-dead defence aerospace industry… The idea of a mixed fleet of Canadian fighter jets should not take flight… Canada ‘interested’ in Swedish firm Saab’s Gripen fighter jets… Saab says Canada’s air force could have Gripen fighter jets in as little as 3 years… U.S. ambassador calls F-35s ‘phenomenal success’ as Canada considers Swedish fighter jets… Gripen vs. F-35 — is it about the jet or the jobs? It depends.
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Barrack Hill: Navigating Canada’s defence and procurement landscape with precision.
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