Defense tech company Anduril Industries is close to a new funding round that would push its valuation to $28 billion, with a major chunk of the capital coming from Silicon Valley billionaire Peter Thiel’s Founders Fund.
The G Round of up to $2.5 billion could put the 8-year-old startup on the brink of a public listing to further shake up the military.
Anduril is expecting a boom in business under President Donald Trump.
“I’ve been on the tech-for-Trump train for longer than just about anyone,” Anduril co-founder Palmer Luckey told CNBC in November, shortly after Trump was elected.
CNBC first revealed the new funding round on Feb. 7.
The Costa Mesa-based company declined to make an official statement. However, an industry source with full knowledge of the matter told the Business Journal that the CNBC report was correct.
And Luckey himself indicated a deal is near.
“Your mind will detonate when you find out what our investors already know,” Luckey wrote on X.
Separately, Anduril said on Feb. 11 it was taking over leadership of the U.S. Army’s IVAS battlefield vision and communications project from Microsoft Corp., a program reportedly worth $22 billion over 10 years (see story, this page).
Cruise Missiles, Fury Drone
Anduril makes an array of military hardware, including airborne attack drones, underwater drones, solid rocket motors and the fighter-like Fury drone. In September, the company introduced the Barracuda-M line of cruise missiles.
According to CNBC, the latest round would double Anduril’s valuation to $28 billion. It was valued at $14 billion just last August following a $1.5 billion Series F round.
Anduril has reportedly signed a term sheet for the funding round.
It would be led by a $1 billion investment from Thiel’s Founders Fund, reportedly the largest financing round check the company has signed.
Anduril’s revenue reportedly has doubled to about $1 billion in 2024.
Challenging Lockheed, Northrop Grumman
Anduril aims to disrupt traditional defense contractors, such as Lockheed Martin (NYSE: LMT), RTX Corp. (NYSE: RTX, formerly Raytheon) and Northrop Grumman (NYSE: NOC), by developing its own products and selling them to military clients, in contrast to the traditional process of contracting and then building. Many of Anduril’s products are autonomous – guided to their targets by artificial intelligence.
It’s shunning giant projects like aircraft carriers and manned fighter jets.
In January, Anduril said it will invest nearly $1 billion in its new 5-million-square-foot “hyperscale” military manufacturing plant just outside Columbus, Ohio. The first products are expected to start rolling off the assembly line in 2026.
The company calls the site Arsenal-1 and says it’s designed to eventually produce tens of thousands of military systems each year.
Candidate Trump Fundraisers
Luckey, who hosted fundraisers for Trump during the 2020 and 2024 presidential campaigns, emphasizes “the idea that we need to be the strongest military in the world is really non-partisan.”
The Luckey and his team are dedicated to shaking up the Pentagon’s procurement process for defense contractors. They aim to bring high-tech, AI-guided systems into service for wartime and military defense.
Anduril emphasizes combining AI with off- the-shelf components for its offerings.
The company grew to 4,000 employees as of January.
Anduril’s sprawling headquarters in Costa Mesa is located where the Los Angeles Times had the printing presses for the Orange County edition.
Oculus VR, Facebook
Most parts of the 32-year-old entrepreneur’s story are well-known: At age 19, Luckey founded Oculus VR, which was acquired in 2014 by Facebook in a deal valued at $2.3 billion, according to Anduril’s website. After a rocky time at Facebook, Luckey went on to co-found Anduril with four colleagues in 2017.
He has said that a public listing may be a goal when the time is right.
Luckey has a fortune estimated at $5 billion, making him the 14th richest Orange County resident, according to the Business Journal’s latest list published last July before the $14 billion valuation became known. Last month, Luckey and Anduril CEO Brian Schimpf were named by the Business Journal as Businesspersons of the Year in the tech sector.
Luckey’s appearance – Hawaiian shirts, cargo shorts and sandals – contrasts completely with the usual view of buttoned-down corporate leaders, and with the medal-bedecked Pentagon generals themselves. Anduril is the name of a sword that symbolizes the fight against evil in the J.R.R. Tolkien’s “The Lord of the Rings” trilogy.
Luckey in 2019 was honored with the Business Journal’s Excellence in Entrepreneurship Award. The Business Journal’s next entrepreneurship awards ceremony is scheduled for March 20 at the Irvine Marriott.
Turbo-Powered Ambitions
While Anduril’s turbo-powered views of working with the government probably would have clashed with the Pentagon’s glacially slow bureaucracy in the past, the Trump administration’s own need for speed may change that.
Still Anduril has had its share of critics.
The industry website Breaking Defense quoted General Atomics spokesman C. Mark Brinkley as calling Anduril “the Theranos of defense,” referring to the fraud-laden blood testing firm that sent its founder to prison.
Brinkley reportedly questioned how Anduril’s fighter-like drone Fury unmanned fighter jet could carry weapons and host a landing gear given its design.
“Sometimes you find these companies, and they say they’re going to use one drop of blood and they’re going to revolutionize the whole world, and then they grow up to be Theranos,” Brinkley told Breaking Defense. “Quite frankly, when you look at the Fury — to me, it looks like trying to use a drop of blood to change the world. And I don’t see it.”
Anduril to Take Over $22B Tech Program from Microsoft
Defense tech company Anduril Industries said it plans to take over leadership of a high-tech battlefield vision, communications and command project from Microsoft Corp. (Nasdaq: MSFT), a U.S. Army project reportedly worth $22 billion over 10 years.
While the Army must still approve the plan, Anduril said in a statement on its website on Feb. 11 it “will assume oversight of production, future development of hardware and software, and delivery timelines” of the Integrated Visual Augmentation System program (IVAS), which features mixed-reality headset goggles for soldiers.
Microsoft has been the prime contractor on the project, which has already involved Costa Mesa-based Anduril at an earlier stage. Anduril is calling the latest deal an “expanded partnership.”
Industry website Breaking Defense said that “the bid to slide current contact work on the 10-year, $22 billion contact comes at a critical juncture for the program.”
The Army “is considering launching a follow-on IVAS competition given the years-long delays on getting the system operational,” according to Breaking Defense.
