Defense tech startup Blue Halo makes lasers that shoot drones out of the sky. This is how it got the Army to buy them.

Moneymaker is now five years into running Blue Halo. In that time, and with the backing of private equity firm Arlington Capital Partners, it has designed, tested, and fielded the Army’s first major laser weapon system. It’s a rapid rate of turnaround, practically unknown to the bigger, more established defense contractors.

After securing a $1 billion contract from the Pentagon this year, Blue Halo is now delivering its Palletized High Energy Laser (P-HEL) system to the Army, enabling them to blast drones out of the sky with AI-powered pinpoint accuracy.

But it’s not just lasers. Blue Halo also produces autonomous systems, counter-drone technologies, space technology, and cyber warfare solutions, all underpinned by its machine learning software, Metis.

“If you look across our portfolio of focus and offerings, there are very few [competitors] that can rival us in that totality,” CEO Jonathan Moneymaker told BI.

The Virginia-based startup is not quite at the level of defense tech unicorns like Shield AI, Anduril, or Epirus — which are increasingly biting at the heels of defense primes — but following a merger this year with Eqlipse Technologies, Blue Halo is fast approaching $1 billion in revenue and has 2,400 employees across 11 states.

And the contracts keep flowing in. This week, it secured a $95.4 million contract with the Space and Missile Defense Command (SMDC) to develop prototype directed energy (DE) solutions.

As the Department of Defense (DoD) has slowly come around to the idea that it should buy commercial military tech, numerous tech startups are hoping to follow the same path, providing solutions for US national security while getting a share of the $842 billion defense budget.

Industry experts have cautioned that grappling with the legendary complexity of the defense industry makes it unlike entering any other growth market.

“Primes are not particularly innovative because they mastered the acquisition process rather than the technology process. However, startups lack a couple of things,” Steve Blank, Professor of Defense tech innovation at Stanford and creator of the Lean Startup method, told BI.

They typically lack a go-to-market strategy and fail to understand the complexity of getting an order from the Department of Defense, said Blank.

The DoD buys to satisfy what’s called a requirement, where someone has specifically requested something. Writing that requirement is a long process that primes themselves typically help out with, Blank explained. Startups are often clueless about that process and completely out of the loop.

Next comes the actual acquisition process, which can take two or three years to even show up in a budget — a problem if you’re a startup in need of a flow of orders and cash to satisfy your investors.

“If you don’t understand this process, then the primes tend to win,” Blank told BI.

Unlike the swathe of Silicon Valley tech firms eyeing up defense, Blue Halo has its roots on the other side — Moneymaker has spent the last 25 years in the defense industry base.

It’s that insider know-how combined with the operational speeds typical of the tech world that Blue Halo says has enabled its success.

“We have the experience, know-how, and sophistication of some of the traditional primes in our space, but we have the entrepreneurial and innovative speed and spirit of some of the newer entrants.”

What has been critical, said Moneymaker, is understanding not just what the military needs but how to earn the trust of defense officials and navigate the procurement process to get it into their hands.

Silicon Valley is facing “some learning curves” in this regard, he noted.

Often, tech companies will have exquisite groundbreaking technology, but it’s not actually what the military needs, or it will be incredibly hard to actually field, he told BI.

“Knowing where it’s applicable and where it’s not is incredibly important. Frankly, if you haven’t grown up in this environment, sometimes that just takes a little longer to get familiar with,” said Moneymaker. “We listen better than a lot of our competition.”

Another factor Moneymaker sees as an advantage is Blue Halo’s lack of Silicon Valley ego.

“We lead without ego,” said the Blue Halo CEO. “We’ve all done exciting things in our careers, but this is about being part of something bigger.”

But despite its industry-insider knowledge and an Arlington base, there are still some sides of Blue Halo that it shares with traditional tech — like a somewhat cringy company community name: Halo Nation.

Next, like any successful startup, it is planning a path to IPO, hoping to be ready within a year. If all goes to plan, the “ring of protection” that Moneymaker says Blue Halo represents will only be getting bigger.