J2 Ventures, a company run largely by U.S. military veterans, said Thursday it has raised $150 million in its second fund. The Boston-based firm invests in startups whose products are purchased by civilians and the U.S. Department of Defense.
At a time when many emerging venture capital firms are struggling to raise second funds, J2's latest fund is more than double the size of its first fund of $67.5 million in 2021.
At first glance, the company might seem like it is benefiting from growing venture capital interest in defense technology. But J2 isn't interested in positioning itself as a defense tech investor.
“Our portfolio is close to national security, but it's not defense-focused,” said Alexander Herstrick, managing partner at J2, which doesn't invest in technologies that would protect a nation's critical infrastructure or thwart attacks, such as drones, robots or surveillance technology.
In return, J2 supports companies whose products help maintain the health and medical care of the approximately 3 million people employed by the U.S. military.
Herstrick said the Defense Department has historically adopted new technologies before they become available to the civilian public — not just with the internet, which was partially developed by the military.
“VA was the first to implement telehealth,” Herstrick said, “and the first to implement electronic health records.”
J2's healthcare investments include Tasso, a maker of needleless blood collection technology, and Lumia Health, a wearable device that measures blood flow to the brain.
The company also backs cybersecurity, infrastructure and advanced computing startups such as Femtosense, which is developing energy-efficient AI chips for smart devices.
J2 backs companies in the pre-seed through Series A stages, writing checks ranging from $1 million to $5 million. Its limited partners include JPMorgan and the New Mexico Investment Council.
Herstrick served as a military intelligence officer in the U.S. Army Reserves, deploying to Iraq and Afghanistan, and was an investor with the Defense Innovation Unit before founding J2.