Military Edge Startup Anduril Scores $1.48 billlion

Military technology startup Anduril Industries has scored $1.48 billion in Series E funding from an army of investors led by Valor Equity Partners, prompting questions about the vendor’s advanced edge computing solutions and their potential for the civil market.

The round values the company at $8.48 billion, nearly double its valuation of $4.6 billion in June 2021, when it obtained $450 million in Series D funding led by independent VC Elad Gil. The round, which had been anticipated since May 2022, brings Anduril’s total raised to date to over $2 billion, according to Crunchbase.

The money will be used, stated Anduril, to advance R&D for products aimed at improving the field combat efficiencies of the U.S. Department of Defense (DoD) as well as those of U.S. allies and partners.

Targeting Defense with Key Edge Innovations

Anduril’s technologies include its secure operating system Lattice, which uses artificial intelligence (AI), machine learning, and sensor fusion to gather data from thousands of sensors and other data sources (such as active shooters) to create a battlefield view, or “mission engine,” that’s updated in real time.

The vendor also specializes in modular battlefield command-and-control units; autonomous vehicles (including ones for use underwater); drones; and threat detection systems called Sentry Towers that deploy AI along with a “360 pan/tilt” computer vision, radar, and sensors to track “objects of interest” in any defense situation. According to Anduril, those use cases include “borders, military bases, oil and gas pipelines, airports and other critical infrastructure.”

All of these solutions deploy Anduril’s patented technologies.

Anduril's Sentry uses AI, sensors, and other technology to detect drones, aircraft, and other objects and transmit the information to a control system. Source: Anduril

Enterprises Must Envy, for Now

The variety of edge capabilities involved in Anduril’s solutions would surely interest enterprises, integrators, and managed service providers in the civil sector, which is massively larger than the government one. But Anduril seems bent on serving U.S. defense customers and those included in the free-world group of allies -- Australia, Canada, and the U.K., for instance.

There may be a couple of important reasons for this. Selling to the U.S. government requires conforming to specific rules and regulations that limit the nature of how a vendor goes to market. For example, to sell to the U.S. DoD, a company must originate and be based in the U.S. and be governed by export controls issued by the State Department. Conforming to these requirements calls for dedicated skills and limits a firm's ability to open sales to the civil markets.

For now, Anduril is succeeding well without the distraction of the civil sector. Over the last year, for instance, the vendor won a 10-year, $967-million contract with the U.S. Special Operations Command to help it with counter-unmanned aircraft systems (cUAS) – aka anti-drone technology. In February 2022, Anduril acquired Dive Technologies, a startup specializing in autonomous underwater vehicles (AUVs), for an indisclosed amount to advance its subsea capabilities. And over the past few months, Anduril has expanded to Australia, setting up a subsidiary there and signing a $100-million contract with the Royal Australian Navy for the design, development, and manufacturing of “Extra Large Autonomous Undersea Vehicles (XL-AUVs).”

With all this business, plus new product releases and the addition of 400 employees to reach the current roster of 1,100, Anduril’s government business seems to be booming sufficiently to encourage the maintenance of focus.

Anduril hadn’t answered a query about its market plans as of this writing.

Onward to Battle

Anduril, based in Irvine, Calif., was founded in 2017 by Palmer Luckey, who also founded Oculus VR, a virtual reality mounted display firm, and sold it to Facebook in 2014 for $2 billion. Luckey has a personal interest in defense technology, having designed VR to help PTSD treatment for returning U.S. veterans while studying at the University of California’s Mixed Reality Lab.

Notably, Anduril seems to have doubled not just its funding but its investor roster. Besides Valor, this round featured returning investors Elad Gil, Andreessen Horowitz, 8VC, Founders Fund, General Catalyst, Lux Capital, as well as new VCs Thrive Capital, DFJ Growth, Lachy Groom, Human Capital, Marlinspike, WCM Investment Management, MVP Ventures, Lightspeed Ventures, and Thomas Tull’s US Innovative Technology Fund.