Palmer Luckey’s tech-focused defense and border protection company Anduril Industries Inc. in Irvine celebrated the Fourth of July with two victories: a major contract win with the Trump administration for border protection, and a Series C funding round that represents a near-doubling of the company’s valuation to $1.9 billion.
Don’t expect the 3-year-old company—one of the fastest-growing and most closely watched Orange County tech-related companies in years—to rest on its laurels.
“This is only the beginning,” Luckey said on July 3, in a Twitter post highlighting the new federal government contract win, reported to be worth “several hundred million dollars.”
Luckey, 27, is the founder of Oculus VR, a virtual reality headset developer that started in 2012. He sold the then Irvine-based firm to Facebook in 2014 for about $3 billion.
He left Facebook in 2017, and soon set up Anduril near John Wayne Airport “to radically evolve our defense capabilities.”
Three years on, the latest signs are he and his founding team are moving along the right path, in particular with the company’s Lattice surveillance platform, an artificial intelligence surveillance system that involves hardware and software, and allows for real-time information analysis.
Major Contract
The product is about to get its most prominent usage to date.
Anduril’s chief revenue officer, Matthew Steckman, told the Washington Post in an article published on July 2 that the company will be building a high-tech, virtual border wall to track down and prevent illegal crossings into the U.S. over the southern border with Mexico.
The report said the deal involved a “major border security contract” and quoted company executives as saying the agreement is worth several hundred million dollars.
The five-year agreement with the U.S. Customs and Border Protection agency calls for the company to deploy solar-powered mobile surveillance towers designed to operate in rugged locations, the Post said.
With cameras and thermal imaging, the sensor-clad towers detect moving objects and feed an artificial-intelligence system capable of distinguishing among animals, humans and vehicles, sending location and mapping information to U.S. patrol agents’ cellphone.
The Customs and Border Protection agency on July 2 said in a statement on its website that 200 “autonomous surveillance towers” will be set up by 2022 to monitor the border electronically. A tower can be moved to a new location within two hours.
“These towers give agents in the field a significant leg up against the criminal networks that facilitate illegal cross-border activity,” Border Patrol Chief Rodney Scott said in the statement, which did not mention Anduril by name.
It appears to be the company’s biggest-ever contract, although Anduril has yet to confirm some aspects of the deal.
Luckey simply said, again via Twitter, that it was a “great article.”
Anduril said its annual revenue currently tracks in the range of $100 million; federal contract databases show it has received some $60 million from other agencies, not including the Border Patrol deal.
The company also is reported to have contracts with the Department of Defense, Department of Homeland Security, Air Force and the U.K. Ministry of Defense.
Political Advantages
“Instead of having a person’s brain be the sensor fusion engine, the software surfaces information up to the point that a decision can be made, so the user can then go and do something about it,” Anduril’s Steckman told the Post.
“Anduril also has developed aerial drones that can be deployed to feed the Lattice system, but the company said it is not planning to use that equipment for its contract with CBP and will rely instead on the tower-mounted mobile cameras,” the report said.
Using the Anduril system may be more acceptable to Democrats and others who have opposed the construction of President Donald Trump’s steel and concrete barrier to prevent illegal crossings from Mexico.
“Immigration policy is a hotly debated issue with a broad spectrum of rational opinions, but every reasonable person (including every politician I have ever spoken with on both sides of the aisle) can agree that we need to know what happens on our borders so we can stop the bad guys,” Luckey said on July 3, following the report.
That same day, company CEO Brian Schimpf said: “Anduril is proud to support U.S. Customs and Border Protection as it expands its use of innovative technology solutions to greatly improve situational awareness and agent safety along the United States border.”
Value Doubled
The day before word of the border control contract became public, Anduril said it raised $200 million in a new funding round, almost doubling the company’s valuation to $1.9 billion.
The Series C round was led by Menlo Park’s Andreessen Horowitz, a prior investor in the company.
Other investors include 8VC, Elad Gil, Peter Thiel’s Founders Fund, General Catalyst, Human Capital, Lux Capital, and Valor Equity Partners, according to Anduril.
The latest funding nearly doubles Anduril’s valuation in just nine months.
Anduril in September secured $127 million in a seed funding round, putting its valuation in the unicorn range of about $1 billion.
Luckey hasn’t had to put much of his own fortune into the new company. Thanks to ample venture capital support, “we’ve never needed to dip into the Palmer pot,” Schimpf recently told Forbes.
Schimpf said funds from the latest funding round would allow Anduril to expand its development efforts in scale and scope, as it tries, in Forbes’ words, to “bring a fast-paced Silicon Valley approach to the slow-moving world of defense contracting.”
Job Openings
Anduril was advertising for 31 jobs in Irvine as of July 6, with positions including security engineer, senior radar engineer and software engineer-video pipeline. Anduril had 200 employees in Orange County as of last week.
It recently inked a lease for a new, 72,000-square-foot warehouse in Santa Ana to help with its expanding local base and product offerings.
Other product lines are in the works at the company, besides Lattice.
It is also working on a counter-drone system, called Anvil. It uses a battering-ram type of drone to knock other drones out of the sky.
A “firefighting tank prototype” has been cited as being under development in prior company reports.
Earlier this year, Luckey’s tweets and online job postings suggested the company was heading into super-fast aircraft, vertical takeoff and landing vehicles and spacecraft.
