Anduril Raises $1.5B, Valuing at $14B and Challenging Top Defense Contractors

Anduril, a defense tech startup, just raised $1.5 billion, valuing it at $14 billion. This positions it to challenge the top five American defense contractors: Lockheed Martin, RTX, Northrop Grumman, Boeing, and General Dynamics. These industry leaders dominate defense contracts, generating billions in revenue.

Founded by Palmer Luckey, Anduril aims to surpass these established firms with a Silicon Valley approach. It recently outperformed Lockheed, Northrop, and Boeing in a drone competition. The company asserts it can operate more swiftly, utilizing software to optimize production.

The latest funding round, co-led by Founders Fund and Sands Capital, represents a substantial increase from Anduril's previous $8.5 billion valuation. The company doubled its revenue to $500 million last year, achieving a high revenue multiple of 28 times. This starkly contrasts with traditional defense companies, such as Lockheed Martin's 1.9 times and Boeing's 1.3 times.

Anduril intends to use the funds to enhance its manufacturing capabilities through a new platform called "Arsenal." This initiative aims to produce tens of thousands of autonomous military systems annually, creating over 1,500 jobs. The objective is to massively scale defense production, prioritizing volume over high-cost, specialized systems.

Anduril's success has reignited interest in defense tech, a sector once considered sluggish and unappealing for investment. Whether Anduril's momentum will benefit the broader industry remains to be seen.