OTTAWA — Newly armed with $21 million in venture capital, defence startup Dominion Dynamics is seeking to overtake foreign leviathans like Lockheed Martin and Raytheon as a prime contractor for the Canadian military.

Canada needs “a company that operates across domains, is global and builds complete platforms,” said founder and CEO Eliot Pence.

This is a big dream. But Pence has some cred—one reason why Canadian VC giant Georgian is breaking from its core strategy of investing bigger money in AI-oriented software startups at later stages of their growth to back an early-stage defence company that makes physical goods.

A Canadian raised on Vancouver Island who went to the University of Victoria before grad school at Yale, Pence was an early employee of U.S.-based Anduril, leading its global business development work from 2018 to 2022. Founded in 2017 to make autonomous drones and military AI systems, Anduril’s latest funding round in June 2025 valued it at US$30.5 billion.

Pence has a similar vision for Dominion Dynamics. Rather than waiting for the military to decide it wants some particular type of equipment and call for bidders to supply it, the Ottawa-based company intends to make gear the military can’t resist—like Ford creating a market by producing cars instead of faster horses.

“I’m a venture-backed entity, so I actually have to shape the requirements. I have to influence how the user is thinking about things, and the best way to do that is not by writing white papers, but by building things and deploying things,” Pence said.

His vision of future warfare is “distributed attritable mass,” he said. “In English, this is a lot of things that are relatively inexpensive, that are connected together.”

Imagine swarms of drones in the skies, replacing (or at least complementing) billion-dollar jets. The idea is that Dominion will provide the webwork of connections that make those swarms effective.

First up is a suite of sensors, transmission gear and processing tools to collect and collate information from the Arctic, gathered by Canadian Rangers on their periodic patrols.

As a reserve force, the Rangers don’t get the latest and greatest tech—until the late 2010s, their standard-issue rifles were a model dating from the Second World War. Dominion Dynamics’s AuraNet is a lightweight system meant to work with iPhones, radios and satellite phones to send texts, images, snippets of video and other types of readings, from frigid, remote places, for headquarters to work with fast.

“If I’m a commander, and I’m looking at the world [through] 6,000 Rangers, I want to know what’s happening in near real-time. We’re giving them the ability to do that,” Pence said.

AuraNet is based on off-the-shelf technology, hardened for Arctic conditions. Pence said Rangers have taken its components into the field and returned with multiple suggestions for features and improvements.

New iterations are to be deployed in the next few weeks with Operation Nanook, the Canadian Armed Forces’ annual set of exercises in the North, he said.

In principle, multiple parts of the Canadian Forces, or allied militaries, could be buyers. In practice, Dominion does not have any contracts yet.

“It’s very risky, but that is ultimately the game I’m in,” Pence said.

Georgian, in concert with pension manager British Columbia Investment Management Corp. and U.S.-based Bessemer Venture Partners, is underwriting the next phase of that risk-taking. That will include expanding Dominion’s workforce from 26 full- and part-timers in Ottawa, Toronto and Kingston, Ont., to about 50 staff by mid-year, Pence said, and opening a 25,000-square-foot factory in west Ottawa.

Although Georgian has cybersecurity firms in its portfolio, Dominion is its first venture squarely in military technology. The firm is treating this investment as a “pathfinder” into a new field with a lot of potential, lead investor Margaret Wu said: “We see defence becoming a broad source of tech innovation across a lot of different disciplines.”

Xanadu was a similarly atypical investment for Georgian in 2019, an entry into quantum computing with a company at an early stage, she said. With an impending deal now to go public at a $3.6-billion valuation, Xanadu became “one of the big venture stories of the last decade.” 

Indeed, Xanadu CEO Christian Weedbrook sent Pence to Wu in the referral that led to Georgian’s investment, she said.

Defence startups have not been very attractive investments in Canada, said Wu, thanks to inherently high costs for military goods, the difficulty of creating complex products from scratch and the government’s infamous procurement failings.

But federal defence spending and policy changes mean conditions are different now, and that has Georgian’s attention, Wu said: “We want a courtside seat.”