J2 Ventures, a venture capital firm mainly led by U.S. military veterans, recently announced that they have successfully raised $150 million for their second fund. Based in Boston, the firm focuses on investing in startups whose products are not only purchased by civilians but also by the U.S. Department of Defense.
Despite the challenges faced by many emerging VCs in securing second funds, J2 Ventures has managed to more than double the amount raised compared to their debut fund of $67.5 million in 2021. This success could be attributed to the growing interest in defense technology among VCs, but J2 Ventures is not positioning itself as a defense tech investor.
According to Alexander Harstrick, the managing partner of J2 Ventures, their portfolio is more focused on being national-security adjacent rather than defense-focused. The firm avoids investing in technologies that protect critical national infrastructure or aid in deterring attacks, such as drones, robotics, or surveillance tech. Instead, they support companies whose products contribute to the well-being and healthcare of the nearly 3 million individuals employed by the U.S. military.
Harstrick emphasized the Department of Defense’s historical trend of adopting new technologies before they become mainstream among civilians. For instance, the Department of Veterans Affairs was an early adopter of telemedicine and electronic health records, showcasing the military’s influence on technological advancements.
In terms of healthcare investments, J2 Ventures has supported companies like Tasso, which develops needle-free blood draw technology, and Lumia Health, known for its wearable device that monitors blood flow to the brain. Additionally, the firm invests in cybersecurity, infrastructure, and advanced computing startups such as Femtosense, a company specializing in energy-efficient AI chips for smart devices.
J2 Ventures typically invests in companies at the pre-seed stage to Series A, providing funding ranging from $1 million to $5 million. Some of their limited partners include major financial institutions like JPMorgan and the New Mexico State Investment Council.
Before founding J2 Ventures, Harstrick served as a military intelligence officer in the U.S. Army Reserve and had deployments in Iraq and Afghanistan. His prior experience as an investor in the Defense Innovation Unit has equipped him with valuable insights into the intersection of military and technological advancements.
