Modern warfare is evolving, and Anduril Industries has a plan to capitalize on this change by reimagining the design and production of American military power.
The defense tech startup recently raised $1.5 billion in a new funding round to expand its weapons manufacturing. The deal, co-led by Peter Thiel’s Founders Fund and Sands Capital, values Anduril at $14 billion, nearly double the startup’s valuation after its previous funding round two years ago.
Anduril’s strategy is to scale up U.S. weapons production by replicating modern techniques and processes employed by corporate giants like Elon Musk’s Tesla (TSLA). In other words, it’s using a software-driven approach that’s flexible enough to build weapons quickly and at scale.
“What we do at Anduril is we take the risk up front to build the capabilities and build the infrastructure that we need to deploy those capabilities very quickly,” Trae Stephens, co-founder and executive chairman of Anduril and a partner at Founders Fund, told Yahoo Finance (video above).
“Are we betting that once we produce these things, the customer will come and buy them?” Stephens asked. “Absolutely, but I think that’s the way it should work. You also have to take risks from an industry perspective.”
Anduril plans to use the majority of the funds to invest in a new software-defined manufacturing platform and build a new manufacturing plant called Arsenal-1.
The plant is expected to eventually employ more than 1,500 people, have a manufacturing capacity of more than 5 million square feet and produce tens of thousands of weapons, such as counter-attack drones and autonomous submarines, per year.
Although the company has not yet determined where the Arsenal-1 plant will be located, it already has experience expanding its manufacturing footprint.
In June, Anduril announced a $75 million investment to expand its solid rocket engine manufacturing and production capacity in Mississippi. That same month, the company also announced the opening of a plant in Rhode Island, allowing Anduril to increase its production of underwater drones.
Startups like Anduril, which aim to disrupt the U.S. defense industry and take on the “big guys” — giants like Boeing (BA), Lockheed Martin (LMT), General Dynamics (GD), RTX (RTX) and Northrop Grumman (NOC) — have attracted venture capitalists to the sector.
Between 2021 and mid-June of this year, venture capitalists invested $130 billion in defense technology startups, according to PitchBook.
Nick Beim, a partner at venture capital firm Venrock, said investors are eager to invest in the next Anduril, Palantir (
