The success of Palantir and Anduril has not only spawned a new generation of aspiring tech companies looking to take on Boeing and Lockheed as new defense giants, it has also spawned a new ecosystem of startups that can serve other defense tech startups.
One such startup is Pryzm. Founded in 2022, the company streamlines government contracting data, helps companies win more contracts, and provides tools for the contracting process. The company today announced a $2 million pre-seed round led by XYZ Venture Capital and Amplify.LA. “Our primary customer base is venture-backed defense technology companies,” said Pryzm co-founder Nick LaRovere.
Pryzm's clients include Forterra, a self-driving car company that has raised a total of $243 million in funding, according to PitchBook, coding startup SysGit and defense tech venture Decisive Point.
LaRovere is a former Palantir employee, and he and co-founders Matt Hawkins (formerly of Lockheed Martin) and David Istrati (a former cloud engineer at Colby College) saw firsthand how complicated the military bidding process can be: To find a contract, companies have to spend hours trawling through different government websites to figure out which contracts they stand to win and who the key decision makers are.
Pryzm collects data from sources like contracts, congressional hearings and news reports to provide customers with a personalized dashboard that includes information like how much funding is currently unallocated, who in government is responsible for allocating it, details of previously awarded contracts and allows startups to understand how their competitors have won government projects.
“We bring all of this together to give you a very targeted heat map, a signal that shows you where the opportunities are and who you need to work with,” LaRovere said.
Of course, this is similar to what Palantir does with other kinds of data: organizing it into dashboards and contextualizing it. Is Pryzm the Palantir of contracts? “Yeah, I don't think that's too far off the mark,” LaRovere says.
Prism can help companies navigate the soft-power side of contracting, he stressed. Because of the opaque nature of DoD deals, contracts don't always go to the best technology manufacturers. They may go to contractors government officials have done business with before and know the ropes of bidding. And winning companies may subcontract to the companies they do business with most often.
Startups have historically been left out of this feedback loop. In a sign of changing times in defense tech, Palantir hired Anduril as a subcontractor when it won a major contract earlier this year.
When startups sift through thousands of posted deals, “the chances of actually landing those opportunities are pretty slim,” LaRovere said. “There's kind of an unspoken truth that by the time something is publicly posted, it's already too late.”
That’s why Washington DC is riddled with ads for RTX, the former Raytheon, Boeing, and General Dynamics (which also sponsored the Kennedy Center opera about drones — really.) It’s also why you see Anduril ads on buses around DC.
“You need to be ahead of the curve,” LaRovere said. “You need to have an impact.”
LaRovere hopes Pryzm will help companies understand which sectors are gaining momentum and who in government is driving that momentum, so that when it comes time to allocate capital, Silicon Valley up-and-comers are first on their minds.
Pryzm's ambitions go beyond data dashboards; the company also offers tools to help companies manage their data throughout the contracting process. Pryzm is more than just a startup — LaRovere said some major companies are already using its software, though he declined to name them — and eventually plans to go beyond defense to help any government contractor.
That's something XYZ Venture Capital's Ross Fubini, who co-led Prism's pre-seed round, hopes will happen. Fubini, who advised Palantir for more than 14 years and was an early investor in Anduril, believes the rise of defense tech startups like Prism will benefit the country as a whole. “I think a better product for the government creates a more stable society,” he said. “And all of us as citizens are better served.”