🕵️♂️🦅 The CIA Invests in Venture Capital??
Hey everyone!
Another rough week in the stock and crypto markets. We’re all in pain :(
Over the past week, we saw:
Crypto Exchanges Delisting Terra Tokens After Meltdown (Bloomberg)
DeepMind’s New AI Can Perform Over 600 Tasks, from Playing Games to Controlling Robots (Tech Crunch)
Google’s Annual Conferece for Developers: Every New Device and Announcement (CNET)
KuCoin Scores Funding at $10 Billion Valuation (Bloomberg)
The CIA Invests in Venture Capital??
What if I told you the CIA has a VC firm that invests in various technologies that would serve national security interests?
Well, it’s real! Founded in 1999, In-Q-Tel is a not-for-profit VC firm based in Arlington, Virginia that is contracted by the CIA to find technology companies that “have real utility and potential to deliver national security capabilities”.
It was once described that “virtually any U.S. entrepreneur, inventor or research scientist working on ways to analyze data has probably received a phone call from In-Q-Tel or at least been Googled by its staff of technology-watchers”.
So how does the process work?
In-Q-Tel focuses on six main areas of innovation they describe as ‘mission-critical’.
Within these six areas, they focus on companies with “ready-soon” technologies and products near the final stages of commercialization and do not require long-term development from the ground up.
This allows In-Q-Tel to find and deliver innovative technology quickly and cost-effectively to the CIA and other U.S. government agencies.
In fact, more than 75% of In-Q-Tel’s investments have been field-tested by the U.S. government and ~50% of their investments have been adopted for use.
So how many companies have they invested in?
Well, In-Q-Tel averages one investment per week and has more than 500 investments. What’s fascinating is that every $1 invested by In-Q-Tel brings around $18 in private sector investment.
Some notable investments include Palantir, FireEye, GitLab, Rocket Lab, and Matterport.
In addition, the technology company behind what we now know as Google Earth received funding from In-Q-Tel, before later being sold to Google.
It’s safe to say that In-Q-Tel are pretty good at spotting innovation when they see it. While In-Q-Tel is mostly public with its investments, what products are actually used by the U.S. government and how they are used unknown to the public. As expected…
Chart of the Week
During this recent market selloff, the valuation of seemingly everything has declined. Most notably (in my opinon), are software companies, which have re-rated to below average historical multiples.
It’ll be interesting to see how low we go in the stock market.