Palmer Luckey, the founder of high-tech defense contractor Anduril Industries Inc., says his Costa Mesa-based company will stay on a hiring spree following the nearly $1.5 billion financial boost it received from investors.
The Series E funding, announced by the company on Dec. 2, nearly doubles the company’s valuation to about $8.5 billion.
It’s among the larger funding deals for a privately held tech company this year, and squarely places Anduril among Orange County’s dozen or so most valuable privately held firms.
The company’s valuation and fundraising prowess continues to grow.
In midyear, Anduril was reported to be seeking its latest funding round; at the time a valuation in the $7 billion or higher range was cited, and a $1.2 billion funding round was expected.
The Business Journal in October was first to report on the Series E round being completed; at the time company officials said only that it had raised more than $1 billion.
The latest backing brings the total funding for Anduril—founded five years ago by Oculus VR creator Luckey, who just turned 30 in September—well over the $2 billion mark. Its last funding round, completed last year, was for $450 million.
Luckey sold Oculus to Facebook for nearly $3 billion in 2014. There have been no reports that Anduril is seeking to be acquired.
The Series E financing confirmed this month will let Anduril accelerate research and development to bring new, cutting edge, autonomous defense capabilities to the market and continue to mature and scale its current business lines with the U.S. Department of Defense, as well as U.S. allies and partners, the company said in a statement.
The Series E round was led by Valor Equity Partners, a longtime Anduril investor, with participation from Peter Thiel’s Founders Fund, Andreessen Horowitz, General Catalyst, and billionaire Thomas Tull’s newly minted US Innovative Technology Fund, among others investors.
The latest financing boost will further company expansion, both in terms of products and employment.
Luckey, speaking to CNBC after the funding announcement, emphasizes that the company is now developing systems for “air, land, sea, sub-sea and space.” That includes the company’s Anvil attack drone, as well as submarines and a variety of surveillance platforms.
Anduril first garnered headlines from landing contracts for surveillance work along the U.S. border with Mexico, using AI-driven sentry towers and a connected operating system called Lattice.
Anduril Chief Legal Officer Babak Siavoshy told the Business Journal in October that while the company maintains a hefty presence in border security, “defense will naturally become a proportionately larger part of our business just by virtue of that’s where a lot of the growth is going to be.”
He said further acquisitions were expected.
Jobs in Overdrive
“While a lot of other tech companies have been laying people off, we’ve been accelerating our hiring,” Luckey told CNBC. “And that’s what we’re going to be using most of this capital to do—go out and hire great engineers who want to work on national security problems that matter.”
Anduril had about 150 job openings for its new headquarters in Costa Mesa posted on its website as of Dec. 7, with other openings at offices including Sydney and suburban Boston.
The company has more than 1,000 employees, a big jump from 700 at the start of the year. It ranked No. 12 among OC’s largest aerospace and defense contractors with 524 local workers earlier this year, according to the Business Journal’s September listing.
“If you look at national security, it’s the most important industry in the world right now,”
Luckey told CNBC on Dec. 2 shortly after the new Series E round was announced.
Luckey says war will increasingly be defined by “small autonomous systems” rather
than traditional systems.
Among its successes in the last 12 months, Anduril has:
• Announced its largest contract win to date, a nearly $1 billion deal with the U.S. Special Operations Command to lead its counter-drone systems integration work.
• Acquired a Boston-area underwater drone company called Dive Technologies.
• Expanded to Australia.
• Introduced Menace, a new command, control, communications and computing platform for military.
• Expanded the offerings of Area-I, a Georgia-based maker of unmanned aerial systems that it acquired in 2021. The latest iterations of Area-I’s technology, the Altius 600M and 700M drones, are designed to be flexible and adaptable and can accommodate multiple seeker and warhead options, with the 700M capable of carrying warheads as heavy as 35 pounds.
“Anduril has made incredible progress delivering on its mission to transform U.S. and allied national security capabilities with advanced technology. Since its founding more than five years ago, Anduril has designed, built and fielded innovative capabilities at scale, at unprecedented speed,” said Antonio Gracias, founder, chief executive and chief investment partner, Valor Equity Partners.
Ukraine Support Continues
Anduril Industries Inc. founder Palmer Luckey says his company will keep supporting Ukraine’s efforts to repel invading Russian forces.
Luckey says Anduril has “been there since the first few weeks of the conflict” with people, hardware and software.
“We’re going to continue supporting Ukraine in that way,” he told CNBC on Dec. 2.
Luckey has not disclosed exactly what has been deployed to Ukraine, so much remains open to speculation.
Luckey already knew Ukraine President Volodymyr Zelensky from talks they had well before Russia’s invasion.
The Anduril founder says the fighting in Ukraine has changed the way tech companies view working for the government, after years of perceived resistance to cooperation.
“The war in Ukraine has given a lot of tech workers an emotional reason to all of a sudden understand the importance of deterrence,” he told CNBC.
A Shift in Warfighting
Anduril Industries Inc. in Costa Mesa says a great shift is underway in how wars will be fought in the future.
Here is how the company phrased the changes in the Dec. 2 announcement of its latest Series E financing round:
“The paradigm of war is evolving. Emerging technologies—like artificial intelligence, autonomy, machine learning —are forcing a shift in the way wars are initiated, waged, resolved, and deterred.
“These changes will provide asymmetric advantages to nations that invest in modern technology. The problems U.S. and allied militaries are facing are fundamentally software problems.
“To continue to enable the U.S., allies and partners to deter adversaries, Anduril is building software-defined and hardware-enabled capabilities that solve mission needs with autonomy, today.
“Autonomous systems will enable the military to operate faster and at greater scale across both tactical and strategic operations.”
Company founder Palmer Luckey phrased the company’s mission more succinctly in June, when he said the goal was to “turn American and allied warfighters into invincible technomancers who wield the power of autonomous systems to safely accomplish their mission.”