The success of Palantir and Anduril hasn’t just spawned a new generation of aspiring tech companies looking to elbow between Boeing and Lockheed as new defense primes. It has now created a new ecosystem of startups that can serve other defense tech startups.
One such startup is Pryzm, founded in 2022 to streamline data around government contracting, help companies land more contracts and offers tools for the contracting process. Today, the company announced its $2 million pre-seed round, led by XYZ Venture Capital and Amplify.LA. “Our core demographic has been the VC-backed defense tech companies,” said Nick LaRovere, a Pryzm co-founder.
Pryzm’s customers include Forterra, which builds autonomous vehicles and has raised $243 million in total funding, according to PitchBook, coding startup SysGit and defense tech venture firm Decisive Point.
LaRovere is a Palantir alum. He and his cofounders Matt Hawkins, who came from Lockheed Martin, and David Istrati, previously a cloud engineer at Colby College, saw firsthand how convoluted the process of bidding for the military contracts is. To find a contract, companies have to spend hours sifting through disparate government websites to figure out which contracts it has a shot at winning and who the key decision makers are.
Pryzm gathers data from sources like contracts, congressional hearings, news reports, and delivers clients a personalized dashboard. It includes the amount of currently unallocated money, who in the government is responsible for allocating that money, and details on previously won contracts, so that startups can figure out how their competitors secured their government projects.
“We’re pulling all this in to give you this really highly targeted heat map or signal into where opportunities may be and who you need to work with,” LaRovere said.
Of course, this sounds a lot like what Palantir does for other sorts of data, organizing and contextualizing it into a dashboard. Could Pryzm be described as a Palantir for contracting? “Yeah, I don’t think that’s too far off,” LaRovere said.
Pryzm, he emphasized, can help companies navigate the soft power side of contracting. The opaque nature of working with the Department of Defense means that contracts don’t always go to the absolute best technology maker. They may go to a contractor that government officials have worked with before and who knows the art of submitting winning bids. And then the winning company may deal out subcontracts to the companies it most often works with.
Startups have historically been left out of this feedback loop. A sign of the changing times in defense tech was earlier this year, when Palantir won a big contract, it brought on Anduril as the subcontractor.
When a startup is sifting through the thousands of posted contracts, “the chance of actually winning those opportunities is pretty low,” LaRovere said. “It’s kind of an unspoken truth that by the time something is publicly posted it’s already too late.”
That’s why Washington, D.C. is plastered with ads for RTX, formerly Raytheon, Boeing and General Dynamics (which also sponsored a Kennedy Center opera about drones — seriously). It’s why Anduril ads can be seen on buses around DC.
“You really need to get ahead of the curve,” LaRovere said. “You need to be influencing.”
LaRovere’s hope is that Pryzm can help companies see which sectors are gaining momentum and exactly who in government is driving that momentum. So, when it comes time to allocate money, Silicon Valley’s up-and-comers are top of mind.
Pryzm’s ambitions go beyond its data dashboard. The company also has tools to help companies manage their own data throughout the contracting process. Pryzm is also going beyond startups — LaRovere said some primes already use their software, although he declined to name who — and, eventually, beyond defense, helping any and all government contractors.
This is what XYZ Venture Capital’s Ross Fubini, who co-led Pryzm’s pre-seed round, is counting on. Fubini, who advised Palantir for over 14 years and was an early investor in Anduril, believes that the rising tide of defense tech startups like Pryzm will benefit the county as a whole. “I think better products for the government creates a more stable society,” he said. “And we all get better served as citizens.”
Source : Techcrunch
