A rare-earth magnets startup backed by Donald Trump Jr.'s venture firm just landed a $620 million Pentagon contract - the largest deal ever made by the Defense Department's Office of Strategic Capital. Vulcan Elements' massive win comes as defense tech contracts increasingly flow to politically connected firms, raising questions about the intersection of venture capital and government spending.
Vulcan Elements just scored the defense tech equivalent of winning the lottery. The rare-earth magnets startup landed a $620 million Pentagon contract that's got the entire defense-venture ecosystem buzzing - not just because of the massive dollar figure, but because of who's backing the company.
The startup is part of 1789 Capital's portfolio, the venture firm where Donald Trump Jr. joined as a partner earlier this year. According to Bloomberg reporting, 1789 invested in Vulcan just three months ago, making this one of the fastest venture-to-government contract cycles on record.
The timing is striking. Vulcan Elements raised a $65 million Series A in August led by Altimeter Capital, and now it's securing a deal worth nearly 10 times that round. The contract is part of a broader $1.4 billion partnership with the U.S. Government and ReElement Technologies to boost America's domestic magnet supply chain.
This isn't just any government contract - it's the largest deal ever awarded by the Pentagon's Office of Strategic Capital, according to Financial Times reporting. The office was created specifically to fund strategic technologies where America needs to reduce foreign dependence, particularly on China's rare earth dominance.
The political optics are impossible to ignore. 1789 Capital has become something of a defense tech kingmaker, with at least four portfolio companies landing government contracts this year alone. The firm also backs established defense contractors like SpaceX and Anduril, both major Pentagon vendors.
Both Vulcan Elements and Trump Jr.'s representatives are pushing back hard against any suggestion of impropriety. A Trump Jr. spokesperson told the Financial Times he "had no involvement in negotiations with the government on behalf of 1789's portfolio companies," while Vulcan denied any Trump Jr. involvement in contract discussions.
