Defense Tech Startup Led by Former Government Leaders Reaches $1 Billion Valuation

Two-year-old defense and national security software startup Rebellion Defense is valued at $1.15 billion and recently raised more than $150 million in a Series B funding round.

It was launched by some members of a self-proclaimed “SWAT team of nerds'' who previously drove digital transformations within the U.S. and U.K. governments. Now, they are producing commercial technological capabilities for those and their allies to use as they work to stay ahead on the evolving competitive landscape.

“We're helping our customers unlock the power of their data and we're doing that in all domains, right—land, sea, air, space, cyberspace,” Rebellion’s CEO and Co-Founder Chris Lynch told Nextgov in an interview Thursday. “And we're putting artificial intelligence and machine learning at the core of everything we do.”

Among other moves, Lynch formed and directed the Defense Digital Service under Presidents Barack Obama and Donald Trump, where he worked to bring more Silicon Valley-like technology, approaches and talent into the Pentagon and confront associated culture gaps. 

He is a serial entrepreneur who spent what he refers to as a “most delightful, unexpected, and oftentimes, very difficult detour” in the federal government from around 2015 to 2019. He built a reputation as the Pentagon’s hoodie-wearing digital guru during his tenure, and as the Defense Digital Service’s founding director, he led a team of engineers and other experts who advised DOD leadership on vital technology-centered topics, like next-generation GPS and combat aircraft. Notable programs like Hack the Pentagon and the multibillion-dollar Joint Enterprise Defense Infrastructure, or JEDI, cloud were established under his leadership. The latter was canceled in April after years of litigation and delays. 

As a federal professional, Lynch said he “realized that the nerds, the people who had such an incredible ability to impact the mission,” were rarely aware of their potential to have an impact—“or given the opportunity.” After stepping down from DDS, he and two people he’d worked closely with over the last several years, Nicole Camarillo and Oliver Lewis, partnered up to co-found Rebellion Defense. Prior to that point, Camarillo served as the chief strategist for the U.S. Army Cyber Command and Lewis was the deputy director of the U.K. Government Digital Service. 

“The transformation that's happening now, going from an industrial era of defense into a software era—the world where military superiority will be defined by the flawless execution of software and technology—it's going to take a different profile of people partnering with the people who are doing the mission,” Lynch said. “And I see that as some of the work that I had been doing [at DDS], but also in myself and my co-founders, the work that we're doing here, and the exceptional people that we try to bring into Rebellion Defense.”

Roughly 160 are employed by the company now, and there’s plans to grow. Former U.S. Deputy Chief Technology Officer Nick Sinai is set to join the startup’s board, where he’ll serve alongside former Google CEO Eric Schmidt and others. 

Lynch said he and his team at Rebellion take time every week to discuss “these things we call our immutable truths,” which essentially “define the characteristics of why” the company exists. They’re simple statements, he noted, like that it’s a software startup that produces software-as-a-service offerings to support the nation’s defense and national security endeavors and that AI and machine learning are vital to its efforts.

“Rebellion was built upon this idea that we had to create something different, something new,” Lynch explained. “And we're doing that in three big areas for our customers.”

Those key realms of focus include comprehensive battlespace awareness, autonomous mission execution and cyber-readiness.

There’s no one set of overarching ethical principles that governs these future-facing digital solutions. Forbes recently reported that Rebellion Defense is working on a contract linked to Project Maven, a controversial program using Google’s image recognition to help improve the military’s capabilities to watch and target with drones. Lynch said the company does not comment on specifics around who customers are, or the use cases and applications they deploy. When asked to, he detailed those three focus areas mentioned above. 

Still, the CEO confirmed that he and the startup’s staff meet monthly to reflect on the types of projects that they would refuse to take on. 

“I think that probably one of the things that I love the most about Rebellion, and in many ways it’s also something that we did at Defense Digital Service, is we said, you know ‘What are we going to work on? What's important?’” he said.

Employees attend sessions to discuss these topics. Lynch noted that for companies entering the defense contracting space, such an approach could prove helpful as it allows for an open dialogue for personnel to share their thoughts, concerns and excitement.

“I think that it's meant a lot for the team here,” he said. “It has created a place where we can actually then double down on how we're going to have an order of magnitude impact for our customers, and where they're going to see us invest our resources.”

Typically, concepts regarding the defense industrial base center on creating planes, tanks and machines and services for combat, in Lynch’s view. But the battlefield of the future will likely rely on more cyber-centered weapons and defense systems. As technology advances, the United States is also shifting away from armed conflicts in the War on Terror and placing more of a spotlight on the “great power competition” with China, Russia and others.

“There's a phrase that I hear that is increasingly concerning—and it's a change. I used to hear ‘near peer competitor.’ Now, I hear ‘peer competitors.’ And I'm worried about that,” Lynch said. “I think that the only way that we're going to really be able to alter the course of the future here, for both the United States, the U.K. and our allies and our partners is by bringing the greatest software engineering talent, the people who build products into this space. And the way that we're going to do that is we're going to build essentially commercial software companies that are just focused on this area.” 

He noted that he and Rebellion’s co-founders do not understand the expectation placed on technology companies to be “dual-use,” or provide services for both military- and non-military needs. The crew saw an opportunity to change this by creating an investor-backed, deliberately defense-facing software startup.

“Why shouldn't the nation's most courageous, the nation's most exceptional venture capital firms invest in this? See, I think it's chickenshit for the firms that don't,” Lynch said. “To say that they're interested in defense and national security, but not actually investing in it, I don't think that's okay. I think that that's part of the problem.”

Venture capital firms that had invested in dual-use companies—but never in startups with one singular military focus—backed Rebellion Defense in its funding so far, Lynch noted. 

“I think that it's because we're at a different place in time, and we're looking at a different threat,” he said. “And when we talk about great power competition, when we talk about authoritarian regimes, I think that we have to rethink the way that we build, the way that we bridge the gap between government and commercial companies, and how we execute on this mission.”