Entering the defense market with speed, scale, certainty 

Defense markets are large and growing globally

With a focus on improving participation of new industrial base participants, acquisition practices are being reformed to help create entry avenues, broaden options for success, and accelerate ability to scale. Change is being advanced via a series of push and pull market dynamics. Government agencies seek more innovation and believe this can be achieved by having a more diverse industrial base. In turn, new entrants continue to put pressure on customers and lawmakers for investment and reform that can enable them to compete with established suppliers. 

Defense technology companies approach market entry differently. Options vary but most include a software tool or platform, a hardware platform or product, a business model, or other technology. The goal is to show enough growth potential quickly to raise capital and then a path to scale and profitability.

Successful entrants have pursued strategies that focus on winning disproportional market share as opposed to capturing any one program or product

Being able to pivot quickly and prioritize has also been a differentiator. 

After raising its Series C, ‘DefenseTechCo’ needed to solve potentially dueling objectives: a need to diversify its bets without diluting its potential to win in each one. Renaissance was asked to support this ambitious growth strategy and provide the analytical framework for it. 

Analytical rigor for strategic clarity

Renaissance's proprietary market entry strategy framework for new entrants (VCQ) and family of budget analysis tools (RPDS) helped evaluate the entire Department of Defense budget across several key dimensions such as upcoming competitions and programmatic points of entry, level of solution maturity and complexity, price and cost elasticity, strength of competition and incumbency, and much more. 

The analysis helped ‘DefenseTechCo’ evaluate which systems provide long-term franchise opportunities, which have market inefficiencies or disruption opportunities, and how the Client’s existing portfolio and post-raise internal resource allocations could be optimized for success. 

Strategic implementation and market capture

The analysis assessed ~$175B of opportunities, prioritizing more than 15 sub-segments, and 40 specific programs from which a top 10 list was prioritized. An actionable roadmap for market capture was created for each sub-segment. 

The tailored strategic plan constructed for Client summarized key opportunities to pursue organically, recommended which ones to prime or sub, helped evaluate and deconflict where ‘DefenseTechCo’ could be a merchant supplier and the impact this could have on its business model and valuation. 

Renaissance also outlined potential acquisition options that could accelerate the strategy and market capture potential. Results provided the Client with clarity and confidence to allocate resources effectively and the analytical rigor to leverage for its next successful round of fundraising.