Dominion Dynamics, which is one of Canada’s fastest-growing defense tech startups, is quite optimistic about public support for military investment. This comes as tensions continue to shape the relationship between the US and Canada. The company’s CEO Eliot Pence said that he believes public support for military investment in Canada will remain strong, while outlining the company’s broader goal of helping strengthen the country’s domestic defense industry.“The ambition is to change the country. So it’s bigger than a company. That said, I think that the best and most material way of changing the country is by building a large Canadian defense prime,” Pence said in an interview with Bloomberg after Dominion Dynamics announced it had raised 139 million Canadian dollars (about $98 million) in a Series A funding round.The funding brings the defense technology company’s total capital raised since its launch last year to C$169 million. The investment comes as Prime Minister Mark Carney’s government advances a defense industrial strategy aimed at expanding Canada’s domestic defense manufacturing capacity alongside increased military spending by Canada and its NATO allies.Pence said recent geopolitical developments, including the Trump administration’s scepticism toward NATO and President Donald Trump’s occasional remarks about Canada and Greenland, have contributed to increased momentum behind Canada’s defense spending. While he expects some of that momentum to ease over time, he said public backing for military investment is likely to continue.“I think there’s broad recognition that the military that we have is not equipped to fight the wars of the future,” he said. Canada needs to demonstrate that “defense isn’t just something we buy — it’s something we build at home,” Pence added.
Focus on Arctic technologies and procurement reform
Dominion Dynamics is developing defense technologies designed for harsh environments, particularly the Arctic. The company plans to use the newly raised funds to expand development of AuraNet, a surveillance and data-sharing platform, and Scout, an autonomous system designed to extend the operational range of crewed fighter aircraft.According to the company, AuraNet has already been deployed with the Canadian Armed Forces during a two-month exercise, where Canadian Rangers used its Arctic-hardened sensors for mission tracking, planning and real-time communications.The company has also opened a 25,000-square-foot manufacturing facility in Ottawa and a development office in Toronto, while hiring engineers from companies including Anduril Industries, Tesla and Alphabet. It plans to expand its workforce to more than 100 employees by the end of the year.Pence also pointed to challenges in Canada’s defense procurement system, saying investment processes need to move faster to match evolving security requirements.“We still have a lot of know-how, the technical talent. What we don’t have is a procurement system able to invest at the pace of the threat,” he said.The Canadian government has introduced a new Defence Investment Agency to accelerate military procurement, although Pence noted that it currently manages contracts exceeding C$100 million, leaving many smaller defense projects outside its scope.Pence also identified Canada’s risk-averse culture as a key obstacle for the country’s defense sector, arguing that government agencies should place greater emphasis on learning through experimentation.“We want to make mistakes quickly and rapidly so that we learn quickly and rapidly. For any of the defense industrial strategy to be implemented, we just need to fundamentally transform how we think about mistakes and risk,” he said.He added that although investor interest in Canadian defense companies has increased, structural restrictions continue to limit investment by some funds, particularly those that avoid companies developing technologies with offensive military applications.