Vulcan Elements, a small start-up specializing in rare earths, has secured a new $620 million loan from the US Department of Defense. This comes three months after receiving funding from 1789 Capital, the venture capital firm in which Donald Trump Jr. is a partner.
According to the Financial Times, the loan is part of a broader $1.4 billion initiative aimed at strengthening domestic production of rare earth magnets in collaboration with ReElement Technologies. The agreement, finalized last month, represents the largest financing issued to date by the Pentagon’s Office of Strategic Capital.
The investment adds to a growing list of federal deals awarded to companies backed by 1789 Capital, a fund with more than $1 billion under management.
Under the new partnership, Vulcan and ReElement will produce rare earth magnets used in critical defense technologies such as weapons systems, drones, satellites, aircraft, and submarines.
The $620 million loan is supplemented by more than $550 million in private capital and additional government support. As part of the structure, the Department of Commerce will acquire a $50 million equity stake, while the US Pentagon will receive warrants in both Vulcan and ReElement.
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1789 Capital participated in Vulcan’s $65 million Series A round in August, a raise led by Altimeter Capital. Co-founder Chris Buskirk later announced on X that the firm planned to join the next investment round as well.
Founded in 2023 by Republican donors Omeed Malik and Rebekah Mercer, 1789 Capital has expanded rapidly and now oversees more than $1 billion. Since Trump Jr. joined in 2024, the firm has invested in 22 companies, including five during 2023 and 2024.
At least four companies within 1789’s portfolio have secured contracts with the Trump administration this year, totaling more than $735 million, while others have benefited from relaxed federal regulations. The firm also holds positions in major defense and aerospace players such as Anduril and SpaceX, both frequent recipients of government contracts.
Some notable defense-related wins include a $45 million US Pentagon deal for Cerebras Systems, as well as U.S. Air Force contracts valued at over $10 million each for PsiQuantum and Firehawk Aerospace.
In October, Unusual Machines—where Trump Jr. previously held a multimillion-dollar stake—received its largest Pentagon contract to date. Even so, Vulcan Elements’ new $620 million award marks the most significant to emerge from the firm’s network so far.
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