GoKawiilDefense startup Hermeus has raised $350 million to keep developing what it calls the “fastest unmanned aircraft,” in a funding round that has pushed its valuation to $1 billion.
The Los Angeles-based startup said Tuesday that it has raised $200 million in equity financing, led by Khosla Ventures. Existing investors Canaan Partners, Founders Fund, In-Q-Tel, and RTX Ventures also participated. New outside money is coming from the venture fund of media conglomerate Cox Enterprises, the publicly-traded closed-end management investment company Destiny Tech100, and others.
The remaining $150 million comes in the form of debt, which Hermeus co-founder and CEO AJ Piplica told TechCrunch will help the startup and its growing cap table maintain some control.
“We build a lot of hardware, we’re expanding our manufacturing capabilities, and if we can finance a large portion of our spend non-dilutively, it’s absolutely the way to do it,” he said in an interview.
Hermeus’s raise comes at a time when venture and corporate investors are flooding money into defense startups. VC investment in defense tech crossed $9 billion over 265 rounds globally last year, according to PitchBook, with corporate investors contributing $2 billion across 28 rounds.
But for Hermeus, it’s not just about good timing.
Piplica attributes at least some of the fundraising success to a change Hermeus made on the technical side a few years ago. The startup had spent time and money developing its own engine, partially out of necessity, he said. After Hermeus courted RTX Ventures — the venture arm of RTX Corporation, the defense contractor formerly known as Raytheon — a new opportunity arose.
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