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Capital · Policy

SBA will vet Pentagon preferred-equity investments in small and midsize defense suppliers

The Pentagon will also refer loan candidates to the SBA, which will use its 7(a) and 504 lender networks. The announcement gives no dollar amount or terms for the equity.

Under a memorandum of agreement announced Monday, Oct. 12, the Small Business Administration will support the Department of War's Economic Defense Unit in executing department-funded redeemable preferred-equity investments in small and medium-sized businesses. The unit may originate those investments in companies that create, expand or restore industrial capacity critical to national security, from munitions and platforms to critical-minerals mining.1

the agreement creates an integrated capital pathway for qualified small businesses

aligning the DoW Economic Defense Unit (EDU) with the SBA Office of Investment and Innovation (OII) and Office of Capital Access

redeemable preferred-equity investmentsDepartment of War-fundedplanned

SBA will provide due diligence, underwriting, transaction support, and portfolio-management assistance, while EDU retains responsibility and ultimate decision-making authority for its investments

SBA-backed capital7(a) and 504 lender networksplanned

EDU will identify firms with financing needs through its Business Operators for National Defense (BOND) efforts and refer potential loan candidates to SBA

Source: U.S. Small Business Administration release, Oct. 12, 2026

Sources
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Each investment would add a government investor to a small or midsize supplier's capital structure. The SBA will provide due diligence, underwriting, investment structuring, transaction documentation and portfolio-management assistance, while the unit keeps "ultimate decision-making authority."1

On the debt side, the unit will find loan candidates through the department's Business Operators for National Defense efforts and refer them to the SBA, whose lenders will help connect eligible firms with SBA-backed capital.1

The agreement builds on the Smaller War Plants Commission the agencies announced on Aug. 25.1–2 Secretary of War Pete Hegseth said the commission "will now be able to surge strategic capital" to small businesses that build ships, munitions and microelectronics.1

The agreement puts department-funded preferred equity, with SBA underwriting, on the same capital pathway as referrals for SBA-backed loans. A supplier taking the equity would gain an investor already planning to report on exits: the agencies will hold quarterly portfolio reviews and collaborate on annual reporting on investment performance and exits.1

Sources (2)
  1. U.S. Small Business Administration: SBA, Department of War Sign Landmark Agreement to Supercharge Strategic Investment in America's Defense Industrial Base (Oct. 12, 2026) legacy.sba.gov
  2. U.S. Small Business Administration: SBA and DoW Establish Smaller War Plants Commission in Historic Effort to Strengthen Defense Industrial Base Capacity (Aug. 25, 2026) legacy.sba.gov
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Capital

CesiumAstro closes $730 million round to support its own planned satellite constellation

The space communications supplier plans a 737-satellite constellation that would take it into operating its own infrastructure. Janus Henderson led the equity round.

CesiumAstro announced Nov. 5 that it closed $730 million in Series D financing. The round valued the company at more than $4.5 billion.1

CesiumAstro raises capital to support its planned satellite constellation

Series D financing and Synchronicity plans, announced Nov. 5, 2026

$730MClosed Series D financing
737 satellitesPlanned Synchronicity constellation

CesiumAstro says the capital will support Synchronicity deployment alongside technologies, manufacturing expansion, spacecraft development and international growth.

Source: CesiumAstro, Nov. 5, 2026. As of Nov. 6, 2026.

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Synchronicity would extend CesiumAstro's business from supplying space technologies and complete spacecraft to developing and operating its own space infrastructure. The planned 737-satellite constellation is intended for commercial, sovereign and defense missions.1

Janus Henderson led the equity round, with participants including Insight Partners, Sands Capital and Magnetar. The announcement also lists $100 million in debt financing through the Export-Import Bank of the United States and JPMorgan, without specifying whether that amount is included in the $730 million.1

CesiumAstro acquired Jariet Technologies, 1Aardvark and Vidrovr in the past 12 months, bringing together semiconductor, mission software and artificial intelligence capabilities.1

The company says the capital will support Synchronicity deployment alongside advanced technologies, U.S. manufacturing expansion, spacecraft development and international growth. It also announced a $500 million investment over five years to expand its Austin headquarters, including advanced manufacturing space.1

Sources (1)
  1. CesiumAstro, "CesiumAstro Secures $730 Million in Janus Henderson-Led Series D at a Valuation Above $4.5 Billion; Unveils Synchronicity Satellite Constellation Following Fully Successful Element-1 Mission," Nov. 5, 2026 cesiumastro.com
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Capital · Drones

Axon targets larger Skydio stake with $1.2 billion investment

Axon will also become the drone maker’s exclusive public safety distributor in the U.S. and Canada.

Axon announced a roughly $1.2 billion minority investment in Skydio on Nov. 5, 2026. It expects its ownership to reach about 37% on a fully diluted basis.1

Axon announced an incremental minority investment of about $1.2 billion in Skydio

Nov. 5, 2026

minority investmentabout $1.2 billionplanned

expected to raise its fully diluted ownership from about 15% (as of Sept. 30, 2026) to about 37%

public safetyU.S. and Canadaplanned

Axon will also become Skydio's exclusive distributor for public safety in the U.S. and Canada.

Axon expects the remaining transactions to close in Q4 2026 and Q1 2027, subject to customary closing conditions

Source: Axon Form 8-K and Exhibit 99.1, Nov. 5, 2026. Data as of Nov. 6, 2026.

Sources
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The investment would pair a larger minority stake with an exclusive public safety sales channel in the U.S. and Canada.1–2 The deal builds on a partnership already bringing Skydio drones to public safety agencies across the U.S. Axon describes it as an expansion of its Drone as First Responder program.2

The initial purchase closed on Nov. 5. Axon expects the remaining transactions to close during the fourth quarter of 2026 and first quarter of 2027, subject to customary closing conditions.1

The investment combines capital for Skydio with purchases from existing shareholders.2 The initial purchase of about $254.9 million in non-voting Series G preferred shares was made directly with Skydio.1 Part of the cash consideration is intended to fund innovation and product expansion at Skydio, Axon says.2

Sources (2)
  1. Axon Form 8-K, Nov. 5, 2026 www.sec.gov
  2. Exhibit 99.1, Axon press release, Nov. 5, 2026 www.sec.gov
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