Silicon Valley denizens may not think of the U.S. Government as a hub for cutting-edge innovation, but the venture firm DataTribe has a 10-year bet that says otherwise. Defense tech has become one of the hottest areas in VC, but DataTribe flips the approach on its head. While companies like Palantir and Anduril develop tech to sell into governments, DataTribe works with recent government alumni to adapt their cybersecurity expertise for the private sector. The approach has paid off, with DataTribe recently closing a $41 million fund—its third.
I spoke with DataTribe’s managing directors Leo Scott and Robert Ackerman last week to understand this strange moment for government-tech industry relations. Elon Musk and Donald Trump were escalating their social media flame war, with Trump threatening to cancel Musk’s portfolio companies’ government contracts. Meanwhile, Anduril had just announced a massive funding round and a $31 billion valuation. “Within all the chaos, there’s opportunity,” Ackerman told me. “But right now it’s a mess.”
DataTribe’s unique approach insulates it from the other government-aligned venture operations, which probably had panicked meetings this weekend about who to align with in the Musk-Trump feud. The tech industry and the defense wings of the government have a longstanding relationship—that’s how Silicon Valley initially got bankrolled, after all, even if some tech companies in recent years have distanced themselves from such work under pressure from employees. But as companies like Meta start to cozy back up to military clients, DataTribe deviates from firms like a16z’s American Dynamism, or even the CIA-affiliated In-Q-Tel, that view the government as their customer. That approach can be risky, as Musk is learning the hard way.
DataTribe does the opposite, advising its portfolio companies not to chase government dollars. Instead, it recognizes the amount of research and development occurring in the government, helping recent departees take those findings and apply them to the private sector. One such portfolio company, Dragos, was founded by former cybersecurity experts at the National Security Agency to work with companies to assess their operational guardrails. The startup, which DataTribe backed at the seed stage, was last valued in a 2021 funding round at $1.7 billion.
Ackerman described DataTribe’s strategy as the “reverse In-Q-Tel,” meaning it looks for technology that already exists within the government, then builds a commercial application for it. That means it’s often working with first-time founders who may have never built products outside of the government, which is why DataTribe participates at the seed stage, preferring to write $2 million to $3 million checks and taking large stakes in its companies of around 25%, as it then works closely with them to scale up. Out of its new $41 million fund, DataTribe has already deployed around half the capital and plans to be fully invested in about a year, according to Scott.
The recent exodus of government workers, including from Musk’s campaign of DOGE-related layoffs, hasn’t created many new opportunities for DataTribe, because many of those leaving are more policy-focused, says Ackerman. Still, the mayhem in D.C., especially around the budget, justifies DataTribe’s approach that government dollars aren’t a safe bet—but that government talent is.
“I do feel like we were waving the flag a little bit earlier in terms of understanding the value within the U.S. Government technologically,” Ackerman said. “The average cybersecurity professional deserves to have the best tools, and we just wanted to be in a position to help focus on that.”
New York goes it alone…Carta has a new report finding that the share of NYC startups with a solo founder has nearly doubled since 2015, rising to 32% in 2024. Mavericks should be cautious if they want outside capital, though—only 13% of VC-backed startups in New York had solo founders.
Leo Schwartz
X: @leomschwartz
Email: [email protected]
Submit a deal for the Term Sheet newsletter here.
Nina Ajemian curated the deals section of today’s newsletter. Subscribe here.
Venture Deals
- Mosanna Therapeutics, a Redwood City, Calif.-based obstructive sleep apnea nasal spray treatment developer, raised $80 million in Series A funding. Pivotal bioVenture Partners, EQT Life Sciences, Forbion, Broadview Ventures, and Norwest led the round and were joined by existing investors Forty51 Ventures, Supermoon Capital, and HTGF.
- Guardz, a Miami-based AI cybersecurity platform for managed service providers, raised $56 million in Series B funding. ClearSky led the round and was joined by Phoenix Financial and existing investors Glilot Capital Partners, SentinelOne, Hanaco Ventures, and others.
- Kargo, a San Francisco-based AI-powered supply chain logistics technology company, raised $18.4 million in funding. Matter Venture Partners led the round and was joined by Lineage, Armada Supply Chain Solutions, and existing investors Sozo Ventures and Founders Fund.
- Coral Vita, a Freeport, The Bahamas-based reef restoration solutions provider, raised $8 million in Series A funding. Builders Vision led the round and was joined by Katapult Ocean, iAlumbra, BDT & MSD, and others.
- Fisent Technologies, a Toronto-based GenAI-powered business processes automation solution, raised $2 million in seed funding from Cloudberry Pioneer Investments, Pega, Sand Dollar Capital, and others.
Private Equity
- Avista Healthcare Partners acquired EBI, the bone healing division of Highridge Medical, a Westminster, Colo.-based spinal solutions developer. Financial terms were not disclosed.
- Beary Landscaping, a portfolio company of Silver Oak Services Partners, acquired Seasonal Solutions, an Overland Park, Kan.-based commercial landscape services provider and certain commercial landscaping assets from Suburban Landscaping, a Chicago Heights, Ill.-based landscaping services provider. Financial terms were not disclosed.
- PSG and 2ndWave Software acquired JAMS, the workload automation and job scheduling solution of Fortra, an Eden Prairie, Minn.-based cybersecurity company. Financial terms were not disclosed.
Other
- Genpact acquired XponentL Data, a Philadelphia-based data products and AI solutions provider. Financial terms were not disclosed.
People
- Amplify Partners, a Menlo Park-based venture capital firm, added Elliot Hershberg as partner. Previously, he was at Not Boring.
IPOs
- Omada Health, a San Francisco-based chronic conditions care management platform, raised $150 million in an offering of 7.9 million shares priced at $19. The company posted $190 million in revenue for the year ending March 31, 2025. U.S. Venture Partners, Andreessen Horowitz, Fidelity, Cigna Ventures, Revelation Partners, aMoon, and Norwest Venture Partners back the company.
- Aura Minerals, a Coconut Grove, Fla.-based gold and copper mining company, filed to go public on the Nasdaq. The company posted $624 million in sales for the year ending March 31, 2025.
FUNDS + FUNDS OF FUNDS
- Thoma Bravo, a Chicago-based private equity firm, raised $24.3 billion for its 16th fund, $8.1 billion for its fifth discover fund, and approximately €1.8 billion ($2.1 billion) for its first Europe fund, all focused on software companies.
- Amplify Partners, a Menlo Park-based venture capital firm, raised $400 million for its sixth fund, $300 million for its sixth select fund, and $200 million for its first bio fund, all focused on technical founders.
