Where We See Opportunity: Legacy Industry Modernization and the Rise of Aerospace Innovation
At Cove Fund, we’re always scanning the horizon for promising opportunities — sectors undergoing disruption, industries ripe for change, and technologies that can deliver lasting impact. Recently, we have seen several interesting companies that have captured our attention as particularly compelling: the modernization of legacy industries using AI and the new wave of innovation in aerospace and defense.
Outdated Industries, Modern Tools: Why AI in Legacy Sectors Excites Us
There are still countless sectors operating with outdated tools, inefficient workflows, and legacy systems that haven’t evolved in decades. That’s exactly what makes them attractive.
Industries like logistics, manufacturing, and healthcare are finally starting to see real value from applied AI — not just buzz. We’re interested in companies that bring deep domain knowledge and are applying advanced tech to solve actual operational problems. Whether it’s predictive maintenance in factories, AI-driven diagnostics in healthcare, or smart routing in freight and supply chains, these innovations are addressing real inefficiencies and unlocking meaningful productivity gains.
Founders working in these overlooked corners of the economy often have both the grit and the insight to build durable businesses. These are the types of companies that can scale with discipline and deliver returns — not hype.
Aerospace and Defense: The Next Frontier is Getting Closer
Southern California has a deep-rooted history in aerospace and defense — and right now, that legacy is being reimagined by a new generation of startups.
We’re seeing a resurgence of interest in companies developing dual-use technologies — solutions that serve both commercial and defense markets. Think autonomous systems, advanced materials, space infrastructure, and cybersecurity. These are massive markets with increasing tailwinds, fueled by rising government interest and national security concerns.
It’s not just hype. Venture investment in defense tech is accelerating. In 2024 alone, defense startups attracted over $30 billion in capital. We think that’s just the beginning.
Startups in this sector often benefit from long-term contracts, defensible IP, and a strong talent pool — especially in Southern California. That combination of deep tech, capital efficiency, and dual revenue streams makes aerospace and defense an opportunity we’re watching closely.
Final Thoughts
At Cove Fund, we’re not trend chasers — but we are opportunity seekers. Right now, the modernization of legacy industries and the reemergence of aerospace and defense stand out as two areas where smart capital, experienced founders, and real-world problems are intersecting. That’s a recipe for breakout companies — and a future we want to help build.
About Us
Cove Fund is a seed-stage venture capital fund based at UC Irvine’s Beall Applied Innovation, a hub for Southern California entrepreneurs and investors. We invest in early-stage technology and life science companies with differentiated products that address large markets and can achieve major milestones with seed funding.
Since our inception, we have invested over $20 million and are actively deploying capital from our $24 million third fund. If you are a Southern California startup seeking funding — or an investor interested in becoming a limited partner — visit us at www.covefund.com.