The missing key for defense innovation? A good coworking space

As the director of commercial engagement for the Defense Innovation Unit (DIU), a Department of Defense (DOD) organization that funds startups developing cutting-edge weapons technology for the military, Sarah Pearson is well acquainted with keeping secrets.
What’s surprising is that her team often keeps secrets from the very startups it recruits.
It’s not for any cloak-and-dagger reason, just bureaucracy. With security clearances taking up to 18 months, Pearson’s team often supplies startups with fake data—made-up enemy capabilities—to simulate real defense scenarios, so they have something to work on until they’re cleared to access classified material. “In the fast-moving world of AI, if it takes 18 months . . . I no longer need that company, their model is already obsolete,” she says.
Enter Nooks, a startup that acts as a kind of coworking space for classified communication. The company’s cutesy name and squirrel logo belie its purpose: to build and maintain a network of these high-tech, espionage-proof, on-demand facilities where startups can handle classified information—spaces known as SCIFs, or sensitive compartmented information facilities.
Traditionally built inside military sites, defense contractor offices, and government buildings, SCIFs are fortified rooms designed to prevent electronic surveillance or intrusion. They require layers of specialized material, electronic shielding, metal reinforcements, and heavy security.
Nooks was founded in 2021 by former Navy pilot Sean Blackman and two fellow aviators to solve a paradox plaguing national security: you need a SCIF to win a defense contract, but probably don’t have the funds or permission to build one without already having a contract. Instead, they asked, what if startups could rent access to SCIFs without the millions in upfront costs and years it takes to construct?
The firm just raised a $25 million Series A round, led by New York’s Zigg Capital, in conjunction with the Space Development Agency within the Air Force, valuing the firm at $105 million. It now plans to launch its first three locations this year: in Arlington, Virginia; Colorado Springs, Colorado; and El Segundo, California. The idea is to offer classified infrastructure as a service, with 50,000-square-foot-sites subdivided into different classification levels, and eventually, grow to a network of 100 sites nationwide, especially areas with tech talent.
“There’s only so much you can do unclassified before it becomes, ‘well, this was a nice science project,’” Blackman says.
Where traditional SCIFs are like buying a home and companies like Westway offer long-term leases, Nooks is more like Airbnb for classified work. For startups, that means faster entry into military innovation—and for the military, a broader talent pool.
‘An outdated process’
SCIFs must be located in buildings without foreign ownership or proximity to adversarial entities, which is why many operators buy entire buildings outright. The design and security standards every SCIF must adhere to, set by the Office of the Director of National Intelligence, evolve sporadically as surveillance threats shift. (Pearson says the reason for the last SCIF update, ICD 705, which contained a laundry list of updates, remains classified.)
Meanwhile, many existing SCIFs are aging out of use, and the upkeep costs are adding up. Virginia Representative Rob Wittman, a member of the House’s Defense Modernization Caucus, says older SCIFs are small, isolated, and “look like a walk-in cooler slammed into the corner of the building.” These older spaces don’t make for an attractive workspace for today’s budding tech talent, and the cost of replacing offers a huge opportunity to Blackman.
Nooks seeks to untangle a bureaucratic bottleneck that defense and tech industry advocates say stifles military innovation. Battlefield technology is rapidly evolving, and startups want to take advantage of federal funding for dual-use tech that has civilian and battlefield applications, and funding is flowing. Already this year, over $3 billion has been invested in defense startups, according to Pitchbook, and the Pentagon’s $1 trillion budget will focus on high-tech weapon systems like drones, cybersecurity, robotics, and AI. Blackman, who had a stint at Facebook and experience in the defense innovation space, saw an opportunity to get government moving more like a startup; beginning in 2021, he and his colleagues interviewed hundreds of people across the defense innovation space to figure out their pain points and earn the trust needed to open Nooks, and eventually landed a small Air Force contract to start testing out the concept.
But to make these startup investments work requires classified info and sharing enemy battlefield capabilities; some DoD requests for proposals can’t even be seen outside a SCIF.
The large defense contractors—called primes—have historically taken the overwhelming chunk of defense spending, and maintain a chokehold on SCIF access. But startups often lack such access, and some go to extreme lengths: hiring staff with preexisting clearances, flying employees across the country to SCIFs, or even selling to a prime just to get in the room.
Building a new SCIF can cost millions—an immediate barrier to entry that comes at a time when warfare is changing faster than ever. Drone development alone has created a cat-and-mouse game, says Eric Snelgrove, founder of the consultancy Revere Federal Strategies. Every four to six months, as new GPS, unmanned aerial vehicle (UAV), or electronic warfare tech gets developed, previous drone models become irrelevant. A startup working on this tech needs classified updates of these rapidly changing conditions to make sure their design is relevant, shortening the feedback loop to “almost constant iteration.”
Wittman says the gap between the SCIF space we have and what we need is “significant,” though he wouldn’t get into specific numbers for security reasons. “Our defense ecosystem is still hampered by an outdated process that just isn’t allowing us to be able to operate at the speed of relevance,” he says.
‘A rear-view mirror nation’
Ken Biberaj, an executive managing director at the real estate brokerage Savills, says SCIF access is fast becoming a standard question among advanced manufacturing and dual-use startups he works with.
“Much of my time now is spent with new defense/dual-use companies looking for a site and the question of a SCIF will always come up,” he says.
San Diego State University sees the potential of locating a Nooks site within a forthcoming mixed-use campus extension featuring 1.6 million square feet of innovation space, allowing students and startups to do classified work on topics like material science research or cybersecurity. Officials see it as a magnet for engineering and research talent, and funding.
The demand for SCIF access grows, which the Pentagon is taking note of, but the challenge remains how fast the government can get more startups in the right, highly-secure rooms.
“We’ve always had the luxury of being what I call a rear-view mirror nation,” says Wittman. “We’ve just had to look and see how far ahead of our adversaries we are. Today, we have to be a windshield nation, see that there are some folks ahead of us, and not only press the gas pedal, but figure out how we’re going to be innovative and creative.”
The Trump administration has focused on bringing new, innovative companies into the defense-industrial complex and signed an executive order on defense procurement reform.
Pearson says the DIU and others are trying to streamline the clearance process; she’s optimistically aiming to cut it to three months. The National Defense Authorization Act budget approved last year also has $100 million budgeted for the creation of more shared classified workspaces, some of which will support Nooks.
“The technology stack that you need to fight a desert war in the Middle East is vastly different from what you need to fight China, right?” says Blackman. “The companies that the DOD tends to work with don’t have that technology; they’re great with planes and tanks and missiles, but they suck at software. There’s just a whole sector that’s really good at this stuff that wasn’t meaningfully being engaged in the defense business.”
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