BCI backs early-stage dual-use startup as Ottawa boosts defence spend
An Ottawa defence-tech startup has raised a rare, oversubscribed $21m seed round in a sector many Canadian investors only recently re-opened to, according to Financial Post.
Dominion Dynamics Inc., based in Ottawa, raised $21m in what Financial Post describes as Canada’s largest early-stage defence fundraise as interest in dual-use and defence technology increases.
The round was led by Georgian Partners Growth LP, with participation from British Columbia Investment Management Corp. (BCI), Deer Management Co. LLC (Bessemer Venture Partners) and angel investors.
Dominion Dynamics develops sensing systems and software for Arctic military and civilian operations.
It is building a sensing network and drones designed to fly alongside fifth-generation fighter jets such as F-35s, and is testing its software in northern Ontario and the Yukon.
BetaKit reports that its main product, Auranet, is a software layer that links hardware sensors into a data fabric to monitor remote Arctic regions and has already been deployed twice, including for use in Northern military exercise Operation NANOOK.
The company has nearly 20 employees and plans to prioritise research and development over revenue this year.
Financial Post reports that Dominion intends to triple headcount to about 75, has a lab in Kingston, Ont., a new development office in Toronto and a 25,000-square-foot factory in Kanata, Ont., scheduled to open in March 2026.
Its team includes Canadian Armed Forces veterans.
Founder and chief executive Eliot Pence previously led international go-to-market strategy at California-based Anduril Industries Inc., which works with the US military on autonomous weapons and surveillance software.
BetaKit notes that Pence wants Dominion Dynamics to become a Canadian “defence neoprime” and to reduce Ottawa’s reliance on US suppliers.
The round lands amid shifting federal policy and capital rules.
Ottawa has pledged $6.6bn over five years for defence spending and plans to release a Defence Industrial Strategy, alongside more than $240m for small and mid-sized firms developing dual-use technologies.
Financial Post also says Business Development of Canada has opened the door for investors to back companies working on military products and created a $4bn platform to support Canadian defence-tech firms.
According to BetaKit, some venture funds had been restricted from investing in defence due to limited partner agreements, but the Business Development Bank of Canada (BDC), a major LP, signalled in December it may relax some of these limits.
In November’s federal budget, the government pledged $82bn for defence overall, including the Defence Industrial Strategy and a defence platform at BDC.
