Capital-intensive aircraft and engine development is often regarded as a poor fit for venture capital, which prefers to invest in sectors such as software and life sciences that offer huge margins and growth potential.
However, the rise of advanced air mobility has attracted early-stage investors, while success stories in the wider aerospace market have shown that big exits from portfolio companies are possible.
“As geopolitical tensions continue to rise, there is a growing demand for aerospace and defense technologies,” notes Dan Ateya, president of RTX Ventures, the venture capital (VC) arm of Pratt & Whitney parent RTX, in an interview with Aviation Week Network's Engine Yearbook.
“In addition, the successful rise of companies like SpaceX, Anduril and Palantir have demonstrated to the VC industry that significant potential exists in this sector," says Ateya. "There are a growing number of companies developing hardware and deep-tech solutions for the aerospace and defense industry, which in turn is attracting increased support from venture capitalists.”
RTX Ventures does not disclose the size of its fund, which has RTX as the sole investor, although since its launch in 2022 it has tended to make 5-10 investments of $2-10 million annually.
These include engine-related businesses such as Ursa Major, Impulse Space, Hermeus, Verdego Aero and H55. “These startups are in the various stages of commercialization, and with our investment and partnership, we are supporting their growth as they work to scale their solutions,” notes Ateya.
He adds: "Propulsion is one of the key areas we are investing in at RTX Ventures, including a variety of propulsion technology companies, because they are critical to the future of aerospace and defense. Propulsion technologies are core to enabling significant advancements for applications in aviation, advanced air mobility, unmanned aircraft, hypersonics, space launch, in-space services, electrification and sustainability."
For the full interview with Dan Ateya, see the forthcoming Engine Yearbook 2025.
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