The Defense Department (DoD) and the Small Business Administration (SBA) announced on Tuesday they approved their first group of small business investment licensees that plan to collectively invest $2.8 billion across more than 1,000 technology companies.
Approved through its Small Business Investment Company Critical Technology (SBICCT) Initiative, the funds will support investment firms and small businesses focused on AI, cybersecurity, quantum computing, and advanced manufacturing, the Oct. 21 announcement said.
The SBICCT Initiative, established in December 2022, aims to scale private sector investment into technology areas critical to economic and national security. Funds licensed under the initiative can access up to $175 million in SBA-guaranteed loans to enhance investment returns, with the DoD providing investment strategies.
“This first group of SBICCT Initiative funds represents a consequential milestone in demonstrating the power of public-private partnerships to build enduring advantage by growing and modernizing our supply chains, strengthening our economic and national security, and benefiting the development and commercialization of critical technologies that are key drivers of our U.S. industrial base,” Heidi Shyu, under secretary of defense for research and engineering, said in a statement.
After the SBA granted the first SBICCT Initiative license in July 2024, four funds have been licensed and nine have been green lighted.
These 13 funds, along with others almost ready for approval, are projected to invest over $4 billion in nearly 1,700 companies working on critical technologies and production processes important to the DoD, according to the release.
“SBA and DoD entered into this historic initiative to ensure America maintains its global competitive edge,” said SBA Administrator Isabella Casillas Guzman. “Today we are proud to recognize the early results of our Agencies’ collaboration and partnership with the U.S. investment community to fill capital access gaps vital to our national and economic security.”
Over 100 additional funds have also expressed interest in the SBICCT Initiative, the release noted, with more applications expected in upcoming quarterly filing windows. The next deadline is Nov. 15, 2024.
