As Lockheed Ups Its VC Fund to $200M, San Antonio Has an Opportunity
San Antonio—The venture capital arm of Bethesda, MD-based security and aerospace company Lockheed Martin is doubling the size of its venture capital arm to $200 million for investments in sensor technologies, autonomy, artificial intelligence, and cybersecurity—news that is sure to attract pitches from cities and companies nationwide.
It has certainly piqued interest in San Antonio, which has been working to broadly promote its burgeoning startup culture, and has specifically focused on certain industries, such as cybersecurity. Organizations such as Port San Antonio, VelocityTX, and Build Sec Foundry, an incubator for entrepreneurs with cybersecurity ideas, have taken root in the Alamo City, aiming to promote the startups that already exist and hopefully spur new ones.
Even so, gaining access to new financing is something many young startups there have trouble with. A few tech-focused venture capital firms opened up shop in San Antonio during the last five years, but have more of a focus on companies that sell scalable software-as-a-service products. Young companies in need of capital are sometimes passed over for startups in cities with more name recognition for early stage work, such as San Francisco or Boston or even Austin, which is only about 90 miles north of San Antonio.
San Antonio has a large talent pool of cybersecurity workers—the San Antonio Economic Development Foundation says it believes the city is the second-largest cybersecurity hub after Washington DC—thanks to its university programs, the presence of the department of defense and military, and various incubator programs, according to Jenna Saucedo-Herrera, CEO of the economic development group.
“Lockheed Martin’s bold decision to double their venture fund presents our local startup community with additional opportunity to attract investment and scale within the second largest cyber security ecosystem in the nation,” Saucedo-Herrera wrote in an e-mail sent by a spokesperson. “This is encouraging news for one of San Antonio’s highest-growth industries.”
Lockheed (NYSE: LMT) has historically had a presence in San Antonio at Port San Antonio, a 1,900-acre property with industrial facilities and office space. One hitch, though: The government contractor announced last year it was closing its maintenance facility that serviced a type of airplane engine and exiting the San Antonio market, according to the San Antonio Express-News.
Port San Antonio has been working with other groups to try to bolster San Antonio’s business community. It has been building out a 90,000-square-foot technology building intended for cybersecurity and other advanced technology companies, with a particular emphasis on government contractors—the Air Force’s cybersecurity division is located right next door.
Other groups are promoting the city’s work in the sector, too. A nonprofit called SAMSOC is trying to help cybersecurity experts in town get more contract work. VelocityTX, meanwhile, is working to provide support to early stage companies in both technology and life sciences.
Lockheed didn’t say whether it would focus on any specific geographies, other than noting that the venture fund would focus on “companies developing cutting-edge technologies that will grow our business and disrupt our industry,” Chris Moran, vice president and general manager of Lockheed Martin Ventures, said in a news release.
Lockheed said it is contributing an additional $100 million to its venture fund, a part of the $460 million it is investing throughout the company, in areas such as research and development, employee training, early education, and a $10 million Lockheed Martin Innovation Prize competition. The company said the money came from savings as a result of tax reform legislation.