Defense AI startup Watchtower Labs launches with $35M and leans on forward-deployed work

Watchtower Labs emerged from stealth on October 21 with $35 million in funding co-led by Shield Capital and Conviction, with In-Q-Tel and Founders Fund also participating. Led by CEO Akhil Iyer, a Marine Corps veteran, the startup builds software that lets defense planners ask logistics questions in natural language, then combines LLMs with its own discrete-event simulation engine to model thousands of scenarios and suggest actions.

According to Upstarts Media, the team of nearly 30 already holds early prototype contracts with major operational commands. Because customers run the software in their own secure environments, often on messy and restricted data, Watchtower relies on forward-deployed legwork: its head of engineering spoke from Hawaii, where much of the team was on site for an exercise with a pilot customer.

Why it matters for FDEs: defense software is one of the original homes of forward-deployed engineering, and Watchtower is another early-stage company building its delivery model around engineers who work on site with users. The company says the new money will go toward hiring for both engineering and roles that work closely with customers.