Godspeed Capital secures $675 million Fund III to invest in defense & government-focused tech startups

While artificial intelligence continues to dominate the headlines, billions of dollars are quietly flowing into other essential sectors, particularly defense and government. As optimism grows around a potential resolution to the Ukraine conflict under the new U.S. administration, the spotlight has shifted to renewing and modernizing the U.S. military. Investors view this as a pivotal moment to support the next wave of defense-focused innovation.

One leading investor in this space is Godspeed Capital, a private equity firm targeting lower middle-market companies in defense, government services, and technology solutions. Today, Godspeed Capital announced the close of its third fund, Godspeed Capital Fund III LP (“Fund III”), securing $675 million in total investor commitments and reaching the fund’s hard cap.

Raised in under two months, the oversubscribed Fund III drew significant interest from high-profile institutional investors globally. With the addition of Fund III, Godspeed Capital has now raised over $1.1 billion since its founding in 2021, reflecting strong confidence in its targeted strategy.

The fund received backing from a diverse base of new and returning investors, including endowments, foundations, health systems, public pension plans, family offices, funds of funds, and advisors—all affirming Godspeed’s focus on growth within the defense and government sectors.

Through Fund III, Godspeed Capital plans to continue its mission of partnering with founders and management teams across defense and government technology. The firm’s strategy emphasizes growth through operational improvements, technology investment, and acquisitions. Since its inception, Godspeed has executed 33 investments and established eight platform businesses across distinct segments at the intersection of public and private sectors. This year, the firm marked key exits with the sales of MOREgroup and Stratus Team, showcasing its successful track record.

“We are thrilled with the strong support we have received from both existing and new investors for Fund III,” said Douglas T. Lake, Jr., Founder & Managing Partner of Godspeed Capital. “Their commitment is a testament to the Godspeed team’s efforts and their confidence in our approach.”

With Fund III now closed, Lake added, Godspeed Capital looks forward to continued partnerships with founder- and management-owned businesses positioned for growth across defense and government sectors. “Our partner-centered approach, grounded in core values, sector expertise, and a long-term vision, makes us an ideal partner for teams aiming to accelerate growth.”

Lazard served as the exclusive placement agent for Fund III, while Davis Polk & Wardwell LLP provided legal counsel.

Founded in 2020 by managing partner Douglas T. Lake Jr., the Washington, DC-based Godspeed Capital focuses on organic growth and acquisition strategies in lower middle-market U.S. companies within the defense, government, and tech sectors. Other key members of Godspeed Capital’s investment team include Nathaniel T. G. Fogg, serving as Partner; Cameron Terry, James Reid, and Jake Sliman, each holding the role of Principal; and Alex Gainey, who serves as Associate.

Godspeed’s typical investments target companies generating $3 million to $30 million in EBITDA, with the flexibility for larger transactions through strategic co-investments. The firm specializes in control buyouts, buy-and-build strategies, corporate carve-outs, and special situations, working with growth-driven companies to provide adaptable capital and operational expertise.