Anduril Secures $1.5 Billion in Funding, Valued at $14 Billion

Defense technology startup Anduril has successfully closed a significant funding round, raising $1.5 billion and achieving a valuation of $14 billion. This funding round is expected to be one of the largest of the year.

Anduril aims to join the ranks of major American defense contractors, a group currently dominated by Lockheed Martin, RTX, Northrop Grumman, Boeing, and General Dynamics. These companies generate billions in revenue from U.S. Department of Defense contracts and have a strong hold on defense production.

Founded by Palmer Luckey, Anduril is positioning itself as a formidable competitor to these established giants. The startup has already made notable strides, winning a contract earlier this year to develop and test small unmanned fighter jet prototypes, beating out Lockheed, Northrop, and Boeing. Anduril's strategy includes leveraging a Silicon Valley approach to accelerate defense production, which traditionally moves at a slower pace.

This latest funding round significantly boosts Anduril's previous valuation of $8.5 billion from December 2022. The company reportedly doubled its revenue to approximately $500 million last year, resulting in a current valuation multiple of 28 times revenue. This is notably high compared to traditional defense companies like Lockheed Martin and Boeing, which have lower revenue multiples but significantly higher revenues.

The funding round was co-led by Founders Fund, which has been a long-time supporter of Anduril, and Sands Capital. Other major institutional investors, including Fidelity Management and Research Company and Baillie Gifford, also participated.

Anduril plans to use the new funds to scale its software-defined manufacturing platform, "Arsenal," starting with the Arsenal-1 factory. This facility will expand Anduril's production space by over five million square feet, enabling the manufacture of tens of thousands of autonomous military systems annually and employing more than 1,500 people.

The company's manifesto outlines its goal to "hyper-scale" defense production, focusing on producing a large number of affordable products rather than a few expensive ones. The Arsenal model is designed to be adaptable and scalable, aiming to rebuild the "arsenal of democracy." The integration of software will enhance manufacturing efficiency, allowing for faster, cheaper production and iterative product development.

Anduril's success with government contracts and private investors has sparked increased interest in the defense tech sector, which was previously considered challenging for investment due to long government contracting timelines. However, it remains to be seen whether Anduril's success will benefit the broader industry or if it will remain an outlier in Silicon Valley.