Tuesday, January 2, 2024

KillTech: "Shield AI expands massive Series F with another $300M in equity, debt, scaling valuation to $2.8B"

Following on the earlier "Oculus founder plans to double UK workforce for defence company Anduril", there's quite a bit of capex and other investment going on in this area.

From TechCrunch, December 29:

Defense tech startup Shield AI has expanded its latest funding round with another $300 million in equity and debt, bringing its total Series F to $500 million, TechCrunch has exclusively learned.

This total amount reflects $200 million in equity closed in November, $100 million in new equity raised at the Series F price and $200 million in debt. The debt provider is Hercules Capital; Shield declined to specify the source of the additional equity. The company’s valuation now stands at $2.8 billion, up from $2.7 billion in November.

Shield AI is building an “AI pilot” to turn aircraft into autonomous systems. Its flagship product, Hivemind, will let teams of aircraft operate independently of remote operators, communications or GPS. Shield CEO and co-founder Ryan Tseng credits the capability to recent advances in compute.

“AI pilots are becoming a strategic conventional deterrent in class with our aircraft carriers and guided missile submarines,” he said in a statement. “But interestingly, it’s the first strategic deterrent that is software-defined and has only recently become possible because of advances in AI and compute power. That’s a huge paradigm shift for aerospace and defense.”

While venture debt gets a bad wrap, it can make a lot of sense — especially for late-stage companies that need an injection of capital to reach the finish line (like profitability or exit). As opposed to being a last-ditch survival mechanism for struggling companies (as it sometimes can be for early-stage startups), venture debt at the later stage can be a smart way to capitalize a late-stage growth company....