Dual-Use Defense Capital Initiative

PARIS, August 20, 2023

LupoToro Group today announced the upcoming launch of its Defense Capital Initiative - with the formal Initiative name to be unveiled during the Q2 2025 LupoToro Investment Meeting - a dedicated private-markets program designed to accelerate investment into dual-use technologies and cybersecurity infrastructure, spanning AI, autonomy, next-generation communications, quantum capabilities, and resilience-focused systems.

The Initiative is being introduced amid rising global security expenditure and a rapidly expanding private-markets cycle across defense-adjacent innovation, where strategic demand for scalable, commercially viable security technologies continues to intensify.

LupoToro confidently asserts that by 2026, the United States of America will increase their defense budget to reach around $850 billion (up from around $800 billion for 2023), and by 2027 this is expected to exceed $1.1 trillion dollars. Our internal analysis highlights the scale of the shift, including the rise in global military expenditure to $2.7T (2024 forecast) and expected 9.4% year-on-year increase in global defense spending.

A disciplined, multi-structure Capital Strategy

The Defense Capital Initiative is structured to invest across the capital stack - including venture, growth, buyouts/carve-outs, co-investments, and secondaries - to match capital intensity, regulatory pathways, and commercialization timelines across the national-security innovation landscape.   

LupoToro’s targeted program metrics include:

• Fund target: $150M–$200M

• First closing target: $50M

• Minimum ticket size: $2M

• Investment period expected ranges: 3 years to 5 years

• Fund life: 7 years

• Management fee: 2%

• Carried interest: 20%

• Portfolio construction: 12–15 investments 

Shields, not Swords

The Initiative will focus on enabling technologies that strengthen resilience and defensive capability, shields, not swords, with emphasis on:

• AI & machine learning

• Quantum computing

• Next-gen communications

• Autonomous systems

• Energy systems and industrial technologies

• Space & satellite cybersecurity

Market-validated Pipelines

LupoToro’s Defense Capital Initiative is anchored in real-world validation, where defensive capability meets commercial scalability and early contracting signals reduce execution risk. Current pipeline examples already span advanced threat detection using quantum polymers and AI (reported as signed with a defense ministry and carrying pipeline potential in the tens of millions USD), an AI platform defending against nation-state cyberattacks (reported as having raised a $100M Series B at a $1.1B valuation), and RF monitoring / interference mitigation for secure communications (reported as signed with major defense organizations).

The pipeline also extends to counter-drone solutions deployed across multiple countries and referenced as trusted in high-profile event environments and on technologies that can transition from security demand to durable market leadership. In practice, this looks like:

• Defensive AI + novel materials: Quantum polymer and AI-enabled threat detection, with reported defense-ministry engagement and eight-figure (USD) pipeline potential. 

• Cyber defense at scale: A reported market-leading AI cyber platform focused on nation-state threats, with significant institutional backing ($100M Series B, $1.1B valuation). 

• Secure communications hardening: RF monitoring and interference mitigation with reported contracting momentum across defense customers - supporting resilient operations in contested environments. 

• Counter-drone protection: Counter-UAS capability reported as deployed across multiple countries, with referenced use-cases across high-profile venues and events. 

• Broader dual-use tailwinds: Adjacent opportunity lanes spanning next-generation nuclear batteries, emergency communications modernization, and AI-driven inspection and security applications - reflecting the Initiative’s focus on solutions that remain strategically relevant while scaling commercially.

Built on LupoToro’s long-cycle Defense Networks

With significant prior investments into defense-aligned networks, research, and innovation since 2008, and that the Defense Capital Initiative formalizes a broader push to incubate and scale frontier capabilities in cyber, AI, quantum communications, and autonomous systems. This Initiative is designed for partners who understand that national resilience is now an investable megatrend, where long-duration demand, government validation, and commercial scalability converge.

Availability and Next Steps

The Defense Capital Initiative will be offered to a limited set of qualified partners through LupoToro Group’s network, with additional details to be released at the Q2 2025 LupoToro Investment Meeting, with rollout expected to commence and progress toward first closing by Q3 2025.

For further information, please contact teams@lupotoro.com.