When most people talk about hurricanes, they talk about the storm itself—the dark, swirling experience of watching trees fall from the right side of a glass hurricane window.
But I’m from Florida and I’m here to tell you: The hurricane doesn’t end when the storm ends—it ends when the power and gas comes back on. When I was a kid, latency was part of that process. My siblings and I would play Candy Land in the sweaty Miami dark, while utilities providers and companies scrambled to figure out who needed help.
What do my childhood Candy Land games have to do with startups and venture capital? Well, power outages are still a problem (perhaps more so as warming oceans fuel more hurricanes), and solutions to problems are what the startup game is all about.
Dan Wright, the cofounder and CEO of Armada, believes that extreme situations like hurricanes reinforce the need for “edge” computing, the practice of processing data locally rather than sending it back to the cloud. “Lots of oil and gas companies are really very concerned about these types of disasters,” Wright says. “You can't have any latency. You have to be able to respond in real time."
Disaster response is the obvious application, but Wright and the Armada crew believe edge technology also has a big role to play in all sorts of remote environments where uninterrupted data access is critical. Think real-time safety monitoring at high-risk worksites, real-time emissions tracking for oil rigs, and automated operations for mines. The company collaborates with Starlink and has recently launched partnerships with companies like Halliburton and Skydio.
Armada came out of stealth in 2023 and has so far raised $100 million, having just announced its Series A in December. And now, Fortune can exclusively report, it has scored another $40 million from Microsoft’s venture fund, M12. Along with the funding, Armada’s products will become available in Microsoft Azure’s marketplace.
It’s a natural fit, says Pradeep Nair, Armada’s founding CTO and a 10-year veteran of Microsoft’s Azure business. “If you look at all of these customers we’re hitting—oil, gas, and mining—these guys are legacy, traditional customers and Microsoft is their biggest vendor,” he says. The partnership with Microsoft “opens up the whole pipeline, without us needing to go through the whole procurement process.”
The company declined to disclose any metrics or the number of current customers. A source familiar with the matter said that the company’s valuation jumped with this extension. Still, it’s a rare thing right now to see investors dazzled by a young company that’s not expressly an AI startup. Sure, Armada’s deploying AI, but it’s not the point. So, what’s resonating?
"People are thinking a lot about edge [computing] because even in highly populated environments, there's this recognition of the difficulties around power,” says Founders Fund partner Trae Stephens. “People are really and increasingly concerned about how we get enough power to the edge. How do we use the data that we’re pulling off the edge?”
Founders Fund, which has been involved with Armada since the very beginning, is among a group of existing Armada investors that includes Lux Capital, Felicis, Valor Equity Partners, 8VC, and Shield Capital. The startup’s mission, Stephens said, began with the relatively vague idea around disconnected compute.
"I feel like every good business has kind of a funny narrative for all of the ideas that it bubbles up at the beginning,” Stephens says. “Then, you're popping all of the bubbles, getting down to the thing that has real product-market fit."
“There are 100 potential use cases,” added Stephens.
Many of these use cases seem to be oriented around high-stakes environments, where a well-timed safety alert can make the difference between life and death. (That’s especially the case, say, on a fire-prone offshore oil rig.)
Is that the deliberate focus?
“The problems that matter the most can only be solved if you bridge the digital divide and bring connectivity, compute, and AI to the data—wherever it is,” Wright says.
See you tomorrow,
Allie Garfinkle
Twitter: @agarfinks
Email: alexandra.garfinkle@fortune.com
Submit a deal for the Term Sheet newsletter here.
Joe Abrams curated the deals section of today’s newsletter.
