How Umbra Raised $100M+ for Deep Tech Hardware

Your SaaS metrics are irrelevant

Let’s be direct: if you’re building a company that makes physical things—satellites, robots, new types of sensors, climate tech hardware—the standard Silicon Valley fundraising playbook is not for you. Chasing monthly recurring revenue (MRR) or a low customer acquisition cost (CAC) will kill your company before it starts.

Umbra, a startup building the world’s highest-resolution commercial radar satellites, raised over $100 million. They didn’t do it by showing a beautiful MRR growth chart. They did it by proving they could solve an incredibly hard engineering problem and that powerful customers, like the U.S. government, would pay for the solution.

Your goal is not to show traction with metrics. Your goal is to systematically de-risk the venture, milestone by milestone.

The Three Great Sins of Hardware Fundraising

Most deep-tech founders make one of three critical mistakes when they try to raise money.

Applying the SaaS Playbook: They build a financial model based on subscription revenue and pitch VCs who only understand software. These investors will ask for customer cohorts and LTV/CAC ratios you can’t possibly have. It’s a waste of time. · Underestimating Capital Needs: Founders used to SaaS seed rounds think $2M is enough. For hardware, a seed round to get you from a concept to a functional prototype might be $3M-$5M. A Series A to scale manufacturing could be $15M-$50M. Be realistic and transparent about the capital required to bend metal. · Confusing Technical Readiness with Market Readiness: Just because you built a prototype that works in the lab doesn’t mean you have a business. You need to prove someone will pay for it, which is a different skill set.

The Dual-Track Playbook: Government & Venture Capital

Umbra’s funding from DARPA, the government’s advanced research agency, alongside VCs like Nimble Partners and Star Castle Ventures, isn’t an accident. It’s a strategy. For capital-intensive companies, especially in aerospace and defense, you must pursue two tracks simultaneously.

Track 1: Non-Dilutive Government Funding

Before you even think about giving up equity, you should be hunting for “free” money from the government. Programs like Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) are designed to fund high-risk, high-reward R&D.

Zero Dilution: It’s grant or contract money. You give up no ownership. · Technical Validation: Winning a competitive government grant is a powerful signal to future investors that your technology is credible. An agency like DARPA has world-class experts vetting your work. · First Customer: Government agencies can become your most important first customer, providing the revenue and use cases you need to cross the chasm to the commercial market.

Identify the right agencies. Is your work relevant to the Department of Defense, Department of Energy, NASA, National Science Foundation? · Regularly check grant portals like SBIR.gov. · Network with program managers within these agencies. Understand their priorities and “problem sets” so you can frame your solution as an answer to their needs.

Track 2: The Right Venture Capital

Most VCs are not for you. A fund that primarily invests in B2B SaaS or mobile apps will not have the patience, capital structure, or expertise to help you. You need to find the niche group of investors who look for exactly your kind of challenge.

Look for the right words: Search for firms that brand themselves as “deep tech,” “frontier tech,” “industrial tech,” “hard tech,” or “dual-use” (government and commercial) investors. · Reverse-engineer success: Look at companies you admire in your space. Who invested in them? Umbra’s backers (Nimble Partners, Star Castle Ventures, 7BC Venture Capital) are a great starting point for research into firms that understand this model. · Ask for long timelines: When you talk to a potential investor, be upfront. Ask them about the longest it has taken for one of their portfolio companies to get to market. Ask about their fund structure and if they have “patient capital” reserved for multi-year R&D cycles.

Your Pitch Deck Is a Lab Report, Not a Sales Deck

When you don’t have revenue, you sell the future by proving the present. Your pitch isn’t about traction; it’s about de-risking. Your investor data room should look different.

Technical Milestones: A clear roadmap showing what you’ve built, what you’re building next, and the key technical hurdles you’ve overcome. (e.g., "Achieved 25cm resolution in simulation," "Prototype antenna deployed successfully in lab test"). · Letters of Intent (LOIs): Non-binding agreements from potential customers are gold. An LOI from a major aerospace corporation or a government agency proves you’re building something the market wants, even if you can’t sell it yet. An LOI is more valuable than 100 survey responses. · Team, Team, Team: Why is your team uniquely capable of solving this problem? Showcase PhDs from top labs, engineers with experience shipping complex hardware at scale, and operators who know how to navigate government procurement. · Intellectual Property: Patents, trade secrets, and unique manufacturing processes are your moat. Be specific about what makes your solution defensible.

My name is [Your Name], and I’m the founder of [Your Company]. We’re building a new type of [your technology] that can achieve [specific technical outcome], which we believe could help [Their Company] solve [specific problem they have, e.g., "monitor pipeline integrity more efficiently"].

We are currently raising a seed round to build our full-scale prototype and are gathering letters of intent from key industry partners to validate our commercial path.

Would you be open to a brief 15-minute call next week to review our technical specifications? A non-binding LOI from you would be a critical signal for our investors.

The Umbra Playbook in Action

Umbra’s journey exemplifies this strategy. They tackled a monumental technical challenge: creating synthetic aperture radar (SAR) satellites that were smaller, cheaper, and higher-resolution than anything on the market.

They likely began with simulations and sub-scale prototypes to prove the physics and engineering were sound. · They engaged with government partners like DARPA early, aligning their technology with national security needs. This provided crucial non-dilutive funding and validation. · With that government backing as a stamp of approval, they approached VCs who understood the aerospace and defense landscape. · Their fundraising wasn’t a single event but a series of tranches tied to hitting specific milestones: first satellite works, first image delivered, constellation deployment begins. Over $100 million wasn’t raised in one go; it was earned with engineering execution.

This path is longer and often more arduous than a software startup’s. But for founders building things that can fundamentally change our physical world, it’s the only path that works.

How to Apply This This Week

Stop researching SaaS VCs. Make a new list of 20 investors who explicitly mention "deep tech," "hardware," or your specific industry in their thesis. · Go to SBIR.gov. Find one grant topic that is a 50% or better match for your core technology and start a draft application. The process itself will teach you what the government values. · Identify 10 dream customers. Draft a crisp, one-paragraph technical summary of your project and a template for requesting a Letter of Intent. · Re-frame your milestones. Change your internal roadmap from being about revenue targets to being about de-risking technical and manufacturing hurdles. What is the #1 thing you need to prove in the next 90 days?