SpaceX wins $2.29B Space Force SATCOM deal; Dell lands $9.7B Pentagon IT contract

Companies mentioned: Airis Labs, Bryan Fenton, Canada, Carlyle, DARPA, DIU, Dell, HASC, Hermeus, In-Q-Tel, Lastwall, NATO Innovation Fund, PSG Equity, Pentagon, RevEng.AI, Saab, SOCOM, Space Force, SpaceX, U.S. Army

Government Contracts

The day's marquee deal is SpaceX's $2.29B Space Force contract to build the Space Data Network Backbone, a LEO SATCOM constellation providing backhaul communications for the Pentagon. This award lands in the middle of an active dispute between SpaceX and the Pentagon over Starlink pricing during the Iran conflict — a dynamic that underscores just how deeply embedded SpaceX has become in US military operations. The Pentagon is simultaneously fighting with and writing multi-billion-dollar checks to the same company, a tension that investors in competing SATCOM providers (e.g., Viasat, SES) should monitor closely.

• Dell won a $9.7B contract to consolidate DoD software licenses — one of the largest single-vendor IT deals in Pentagon history. This is back-office modernization, not cutting-edge warfighting tech, but the sheer scale crowds out mid-tier defense IT competitors and reinforces the incumbency advantage of enterprise giants in DoD.
• Hermeus saw its DIU contract expanded for the Mk 2.1 Quarterhorse high-speed drone. DIU's continued investment here signals real progression from demonstrator to prototype — the hypersonic UAS category is moving from science project to acquisition pipeline.

Funding Activity

• RevEng.AI raised $15M Series A with a remarkable investor syndicate: NATO Innovation Fund leading alongside In-Q-Tel, Sands Capital, and IQ Capital. Dual backing from NATO's own VC arm and the CIA-linked In-Q-Tel in a single round is rare and signals this software supply chain verification startup is being groomed for transatlantic government adoption. This is a post-SolarWinds, post-MOVEit capability play.
• Airis Labs, an Israeli AI video platform for defense, raised $31M Series B led by PSG Equity with TLV Partners and StepStone Group. PSG is a growth equity firm, not a defense-native fund — their involvement suggests Airis has commercial-grade unit economics, not just government pilot revenue.
• Lastwall raised C$16M for quantum-resilient cybersecurity, led by BDC. Small round, but quantum-safe crypto is a Five Eyes priority with mandatory transition timelines approaching.

Partnerships & M&A

Saab is having a strong week internationally. Canada entered formal GlobalEye AEW&C purchase negotiations, while separately Ukraine confirmed it will acquire up to 20 Gripen fighter jets. Saab is rapidly expanding its NATO customer base beyond its traditional Swedish anchor, and Airbus is reportedly exploring fighter collaboration with Saab as the FCAS sixth-gen program fractures. For investors in European defense primes, Saab's strategic positioning is arguably the strongest it has been in a decade.

Meanwhile, Carlyle quietly hired former SOCOM commander Bryan Fenton as an operating executive — a signal that the PE giant is deepening its defense portfolio capabilities and likely eyeing defense-adjacent acquisitions.

What to Watch

• SpaceX pricing power vs. Pentagon dependence: The simultaneous $2.29B contract award and Starlink price dispute during the Iran conflict creates an unusual dynamic. If SpaceX successfully negotiates higher per-unit Starlink fees, it sets a precedent for commercial space vendors extracting premium pricing from the DoD during active operations — a structural shift in how the Pentagon budgets for commercial space services.
• NATO Innovation Fund deal flow accelerating: RevEng.AI's round, co-led with In-Q-Tel, suggests the NATO fund is moving beyond its initial cautious pace. Watch for more transatlantic defense cyber and AI deals where NIF and US IC-linked funds co-invest — this creates a powerful signal for allied interoperability requirements.
• Saab as the emerging mid-tier NATO defense champion: Between GlobalEye for Canada, Gripen for Ukraine, and Airbus FCAS overtures, Saab is assembling an order book that could fundamentally change European defense industry power dynamics. If the FCAS program fractures further, Saab's valuation could reprice significantly.

Deals & Contracts

SpaceX — Government-backed Funding ($2.29B)

Space Defense

Space Force awards SpaceX $2.29B to build the Space Data Network Backbone (formerly MILNET), a LEO constellation providing backhaul SATCOM for Pentagon data transfer. This cements SpaceX's position as the US military's indispensable space communications provider — and comes amid active tensions over Starlink pricing during the Iran conflict, underscoring the Pentagon's dependence on a single vendor for critical warfighting infrastructure.

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Dell — Government-backed Funding ($9.7B)

General Defense Tech

The Pentagon awarded Dell a $9.7B contract to consolidate software licenses across the department — one of the largest single-vendor IT deals in DoD history. This signals the Pentagon's continued preference for enterprise incumbents over smaller defense IT startups when it comes to back-office modernization, and likely reduces competitive entry points for mid-tier defense IT firms seeking licensing and lifecycle management work.

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Hermeus — Government-backed Funding

Unmanned Systems · DIU

DIU expanded its contract with Hermeus for the Mk 2.1 Quarterhorse high-speed drone, a significant vote of confidence in the hypersonic UAS category. DIU contracts typically use OTA, giving Hermeus a faster fielding path than traditional acquisition. For defense investors, this is a strong signal: Hermeus has now progressed from hypersonic demonstrator to a production-oriented prototype backed by the Pentagon's innovation arm.

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Airis Labs — Funding Round ($31M)

AI & Autonomy

Israeli AI video platform for defense raised $31M Series B led by PSG Equity — a growth equity firm known for scaling SaaS companies, not a defense-native investor. This crossover interest suggests Airis Labs has commercial-grade product traction, not just government pilots. The Israeli defense AI ecosystem continues to attract capital at a pace that should concern US competitors in the ISR video analytics space.

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RevEng.AI — Funding Round ($15M)

Cybersecurity

London-based cybersecurity startup focused on software supply chain verification raised $15M Series A led by the NATO Innovation Fund with In-Q-Tel and Sands Capital participating. Having both the NATO Innovation Fund (the Alliance's own VC arm) and In-Q-Tel (CIA/IC-backed) co-investing in a Series A is an exceptionally strong dual endorsement — this company is being positioned as a transatlantic standard-setter for software supply chain security, a critical post-SolarWinds capability gap.

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Lastwall — Funding Round (C$16M)

Cybersecurity

Canadian quantum-resilient cybersecurity provider raised C$16M led by BDC (Business Development Bank of Canada). While a modest round by US defense VC standards, quantum-resilient crypto is an area of intense Five Eyes government interest. Lastwall is positioned in the post-quantum transition window that NSA and allied agencies have been flagging as an urgent near-term priority.

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Saab — Strategic Partnership

General Defense Tech

Canada entered formal talks with Saab for a GlobalEye AEW&C purchase, a major airborne early warning procurement that would make Canada the second export customer after the UAE. For Saab, this deepens its NATO footprint beyond Gripen sales to Sweden and potentially Ukraine, and signals that GlobalEye is emerging as the preferred AEW platform for mid-tier NATO allies unwilling to pay Boeing E-7 Wedgetail prices.

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Tags: cybersecurity, drones, funding, government contract, hypersonic, satcom, space defense