- Defense startup Anduril has raised $1.5 billion in a round led by Founders Fund and Sands Capital.
- It plans to use the investment to "rebuild the Arsenal of Democracy."
Anduril, the disruptive defense tech startup founded by Palmer Luckey, has raised $1.5 billion in its latest funding round as it strives to transform the defense landscape.
The series F round, led by Peter Thiel's VC firm the Founders Fund and Sands Capital, values the company at $14 billion, up from $8.5 billion last year.
But rather than more futuristic flying weapons, Anduril's priority is the assembly line.
The autonomous weapons maker announced that it would invest "hundreds of millions of dollars" in the development of a 5 million square foot factory named Arsenal-1.
"With Arsenal, Anduril's goal is to manufacture and produce tens of thousands of autonomous weapons systems addressing the urgent needs of the United States and our allies," the company said in a press release.
The first factory will be built at an undisclosed US location and be capable of producing all of Anduril's devices except energetics.
Arsenal-1's goal is to "hyperscale" defense production.
"The bottom line is America and our allies don't have enough stuff," said chief strategy officer Chris Brose.
Legacy defense procurement is slow, and the results are so complex that they are "effectively irreplaceable," he said.
If the US wants to generate a deterrent against its biggest rivals or win a potential war against China, Brose thinks scalability is crucial.
At Arsenal-1, the priority is simplicity, modularity, and adaptability to cope with fluctuations in demand.
"Having all of that under one roof allows us to very flexibly move those around and reallocate them to take into account changes in products that we're going to need to make quickly."
That would not be possible when resources are spread across a wide area, Anduril said.
The facility will be based on an AI-powered software platform, the company said.
If the plans seem reminiscent of Tesla's revolutionary approach to manufacturing, that's no coincidence. Anduril hired former Tesla manufacturing lead Keith Flynn last October.
Applying principles followed by companies such as Tesla and Apple, Anduril is focusing on software optimization, centralizing operations, manufacturing-friendly product designs, and scalability.
Even the factory is designed to be copied and placed anywhere, Brose added. "Our belief is that this is eminently possible in defense because it's been done in the commercial world."
Anduril's push to scale up production capabilities marks another step in its efforts to compete with big legacy defense contractors. The startup, which was founded by Luckey in 2017, recently won major defense contracts including the US Air Force's Collaborative Combat Aircraft program and Australia's Ghost Shark program.
But as it pressures the defense sector to modernize, some analysts have warned that the narrative over external threats could be "overhyped and overblown."
Roberto Gonzalez, a professor of cultural anthropology at San Jose State University and author of "War Virtually," told Business Insider that China doesn't necessarily pose the existential threat that many in the defense and VC communities sometimes claim.
"Is the rhetoric and the hype getting so great that China feels the need to respond and feels that kind of existential threat themselves? Once you're in that situation, what you're doing is reliving the Cold War days," said Gonzalez.