VC firm Embedded Ventures launches fund for national security, space

Los Angeles-based Embedded Ventures kicked off an inaugural $100 million fund, the firm announced Tuesday, as it looks to back companies building for both commercial and national security customers, especially in the space sector.

Embedded is led by general partners Jenna Bryant and Jordan Noone, the latter who came to the VC side after co-founding 3D rocket printer Relativity Space. The firm has previously made early investments in a half dozen aerospace startups, including satellite communications company Akash Systems and space data-focused Slingshot Aerospace, Embedded said.

But Bryant and Noone noted those deals were fundraised on a case-by-case basis – with the new fund marking the next stage of Embedded’s growth.

“We have patient capital and – even if that means we have to miss out on an opportunity – that’s OK. Every company has to go through our diligence process and it’s more thorough than most,” Bryant said in an interview with CNBC.

Embedded is focused on investing in dual-use technologies, meaning products that serve both commercial and defense customers. In 2021, Embedded signed a cooperative agreement with the U.S. Space Force – which Noone said has acted as “a very open door conversation” between the firm and the military branch.

“Often venture investors have the first eyes on new technologies,” Noone said. The firm’s relationship with the Space Force is aimed at “how we get that in the eyes and ears of people who are making the decisions on what to adopt, or where to drive things like congressional funding,” he said.

Noone and Bryant also said they have brought on operating partner Mandy Vaughn, who most recently led the national security subsidiary of Virgin Orbit and oversees the government business development side of the VC firm.

While Embedded declined to specify how much of the $100 million fund it raised during the first close, Noone said it was a “substantial” amount, expecting to complete the raise by the end of the second quarter.

Embedded is kicking off its due diligence process with six new potential investments, Noone said, noting the strength of its young portfolio.

None of the companies it’s invested in have seen layoffs or “down rounds” of valuation, Noone said.