Ex-Marine and Microsoft vets launch Watchtower Labs with $35M to bring AI to military logistics

What happened

After leaving the military, Iyer worked on counter-drone technology and later invested in defense startups at Shield Capital, where he watched senior military leaders try to figure out how to put AI to practical use. The Bellevue-based defense tech startup, co-founded by a former Marine special operations officer and two longtime Microsoft engineering leaders, is building AI and simulation software to help military planners anticipate logistics needs. Microsoft is a software and software development company based in Redmond.

Watchtower Labs co-founders, from left, Souren Aghajanyan, John Morman, and Akhil Iyer. (Watchtower Labs Photo) Watchtower Labs , a Bellevue, Wash.-based defense tech startup, emerged from stealth Wednesday with $35 million to build AI software that helps military planners make faster decisions about logistics and operations.

Shield Capital and Conviction co-led the seed round (an early stage of company funding), with participation from Founders Fund and In-Q-Tel, the investment arm that provides support for the U.S. It’s the first outside funding for Watchtower, which was incubated inside Shield.

Watchtower was co-founded by CEO Akhil Iyer , a former Marine Corps infantry and special operations officer who said that like many veterans, he was frustrated that the technology on commercial iPhones wasn’t making it into the field with troops. Iyer’s Watchtower co-founders are CTO Souren Aghajanyan and head of engineering John Morman , longtime Microsoft engineering leaders who worked on large distributed systems and fraud protection.

Iyer said his first call after deciding to build Watchtower went to Lou Manousos , who founded security company RiskIQ, sold it to Microsoft in 2021 and later became a corporate vice president there. Aghajanyan and Morman had worked on Manousos’ team, and they were already thinking about how simulation and AI could improve planning.