Military healthcare-focused J2 Ventures raises $150 million for its second fund

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J2 Ventures, a firm run primarily by U.S. military veterans, announced Thursday that it has raised a second fund of $150 million. The Boston-based firm invests in startups whose products are purchased by civilians and the U.S. Department of Defense.

While many emerging VCs are struggling to raise second funds, J2’s latest vehicle more than doubled the size of its 2021 debut fund of $67.5 million.

At first glance, it might seem like the firm is benefiting from VCs’ growing interest in defense tech. But J2 has no interest in positioning itself as a defense tech investor.

“Our portfolio is national security-related but not defense-focused,” said Alexander Harstrick, J2’s managing partner. The firm does not invest in technologies that protect critical national infrastructure or help prevent attacks, such as drones, robotics or surveillance technology.

Instead, J2 supports companies whose products help maintain the health and well-being of the nearly 3 million people serving in the U.S. military.

Harstrick said the Defense Department has historically adopted new technologies before they become popular among civilians. And it’s not just the Internet, which was developed in part by the military.

“The Department of Veterans Affairs was the first department to use telemedicine,” Harstrick said. “They were also the first to adopt electronic health records.”

J2’s healthcare investments include Tasso (a maker of needle-free blood draw technology) and Lumia Health (a wearable device that measures blood flow to the brain).

The firm also backs cybersecurity, infrastructure and advanced computing startups such as Femtosense, a developer of energy-efficient AI chips for smart devices.

J2 supports companies from the pre-seed stage to Series A and issues checks ranging from $1 million to $5 million. The firm’s limited partners include JPMorgan and the New Mexico State Investment Council.

Harstrick served as a military intelligence officer in the US Army Reserve and deployed to Iraq and Afghanistan. Prior to starting J2, he was an investor in the Defense Innovation Unit.

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