- The defense startup Anduril raised $1.5 billion in a round led by Founders Fund and Sands Capital.
- It said it planned to use the investment to "rebuild the arsenal of democracy."
- Anduril is planning a 5 million-square-foot factory to "hyperscale" defense manufacturing.
Anduril, the defense-tech startup founded by Palmer Luckey, raised $1.5 billion in its latest funding round as it strives to transform the defense landscape.
The Series F round, led by Founders Fund — Peter Thiel's venture-capital firm — and Sands Capital, valued the company at $14 billion, up from $8.5 billion last year.
Rather than 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.
It said the factory would be built at an undisclosed location in the US and be capable of producing all Anduril's devices except energetics.
The company said its goal with Arsenal-1 is to "hyperscale" defense production and "rebuild the arsenal of democracy."
"The bottom line is America and our allies don't have enough stuff," Chris Brose, Anduril's chief strategy officer, said.
He described legacy defense procurement as slow and the results as so complex that they are "effectively irreplaceable."
Brose argued that if the US wants to deter its biggest rivals or win a war against China, scalability is crucial.
The company said Arsenal-1 would prioritize 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," Brose said.
Anduril said that wouldn't be possible with resources spread across a wide area.
It said the facility would be based on an AI-powered software platform.
If the plans seem reminiscent of Tesla's revolutionary approach to manufacturing, that's no coincidence. Anduril hired Keith Flynn, a former Tesla manufacturing lead, 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 said, adding, "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 Luckey founded in 2017, recently won major contracts for the US Air Force's Collaborative Combat Aircraft program and Australia's Ghost Shark program.
But as Anduril pressures the defense sector to modernize, some analysts have described the narrative about external threats as overhyped and overblown.
Roberto González, a professor of cultural anthropology at San Jose State University who wrote the book "War Virtually," told Business Insider that China didn'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?" González said. "Once you're in that situation, what you're doing is reliving the Cold War days."