DOGE team secures VC funding for new venture

Former members of the controversial Department of Government Efficiency (DOGE) have launched a new venture capital-backed startup, aiming to apply their cost-cutting playbook to private industry. The holding company, named Special, has secured funding from billionaire Marc Andreessen’s firm a16z and other former DOGE colleagues.

In an announcement on a16z’s Substack, Nate Cavanaugh and Justin Fox,who previously led DOGE’s operations across multiple federal agencies,described their venture as building “an operating system to transform critical American industries with AI.” They argue that “Main Street” suffers from the same inefficiencies they claim to have targeted in government. The strategy involves vertical integration: acquiring businesses in key sectors and running them through Special’s proprietary system. Their first target is senior care, under a vertical called FigureHealth. In an interview with TBPN, Cavanaugh revealed Special is also eyeing “markets like construction, manufacturing, other very labor intensive, highly regulated markets” where they believe lessons from DOGE can be applied.

The founders’ rhetoric echoes recent Republican talking points, particularly around alleged waste in blue states. “One needs to look no further than childcare learning centers in Minnesota or hospice businesses in California to find immense waste at the state level from businesses that benefit from taxpayer dollars,” they wrote. These allegations of fraud were central to DOGE’s own justification for slashing government contracts, eliminating jobs, and even dismantling the US Agency for International Development (USAID). Earlier this year, similar fraud claims against Minnesota childcare centers were used to justify the Trump administration deploying thousands of immigration agents to the state.

“This pitch relies on DOGE-y tropes, with references to fraud in Minnesota. It’s a very bro-y perspective on government and what the issues are,” said Don Moynihan, a professor of public policy at the University of Michigan. “If you think the biggest issue in the American government is welfare fraud, then that suggests a pretty narrow perspective on the major challenges that we face right now. But that has been the perspective of DOGE, Musk, and the rest of the administration.”

Andreessen Horowitz is leading the funding round, with additional backing from several former DOGE teammates. These include Steve Davis, Elon Musk’s right-hand man who coordinated DOGE’s operations; Antonio Gracias, founder of Valor Equity Partners and a close Musk associate involved with DOGE’s work at the Social Security Administration; Baris Akis, a Turkish national who acted as an informal recruiter for DOGE; Anthony Armstrong, former CFO at Musk’s xAI; Donald Park, who worked at the Small Business Administration under DOGE; and Adam Ramada and Brooks Morgan, who founded BANNER VC after leaving DOGE in August 2025. Coinbase founder Brian Armstrong and Shyam Sankar, CTO of Palantir, also participated. Cavanaugh and Fox, along with their apparent investors, did not respond to requests for comment.

During their tenure at DOGE, Cavanaugh and Fox orchestrated the forcible takeover of the Congressionally funded nonprofit US Institute of Peace (USIP). After being installed as USIP’s acting director, Cavanaugh attempted to gift its building to the government, a move now tied up in ongoing litigation. Cavanaugh was also appointed acting director of the Interagency Council on Homelessness, where he placed nearly all staff on administrative leave.