The direct hits just keep coming for the defense tech sector.

Just a day after anti-drone tech startup Epirus raised a $250 million Series D, defense and aerospace startup Shield AI locked up a $240 million F-1 strategic funding round at a $5.3 billion valuation.

The new valuation is nearly double the company’s previous $2.7 billion valuation after it raised a $200 million Series F in October 2023 (it later added another $300 million in debt and equity to the round).

San Diego-based Shield AI creates an array of intelligent, autonomous systems for the defense sector. Its software, for instance — Hivemind Mind — enables aircraft to operate autonomously in high-threat environments.

The new funding received what the company called “major participation from strategic investors” Hanwha Aerospace and L3 Harris Technologies, as well as participation from existing investors including Andreessen Horowitz, US Innovative Technology Fund and Washington Harbour Partners.

Founded in 2015, Shield AI has raised $1.3 billion, per Crunchbase.

Big dollars for defense

If rounds such as those for Shield AI and Epirus keep up, defense tech should easily blow past last year’s venture numbers.

Funding to VC-backed startups in defense — defined here as the industries of military, national security and law enforcement — hit $3 billion in 2024, per Crunchbase data. That’s a slight 11% uptick from 2023, which saw $2.7 billion raised.

Just last month, autonomous surface vessels maker Saronic locked up a $600 million Series C led by investor Elad Gil that valued the startup at $4 billion. Based in Austin, Texas, Saronic designs and manufactures autonomous surface vehicles — basically drones for the U.S. Navy that move along the water’s surface.

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Illustration: Dom Guzman