With massive funding round and $31 billion valuation, Anduril is nearing the size of defense industry giants it wants to displace

Defense company Anduril, which builds autonomous drones, virtual reality headsets, and other AI-powered technologies for the U.S. military and its allies, said it had closed an oversubscribed $2.5 billion funding round on Thursday.

The new funding round, which has more than doubled the company’s valuation to $30.5 billion, was led by Peter Thiel’s Founders Fund, which invested $1 billion in the round—the fund’s largest check ever, according to the firm. 

The fundraise marks an important milestone for the defense tech industry, which has swelled in size as the Department of Defense embraces venture capital-funded startups in an effort to supply its forces with the latest, cutting-edge technologies as global tensions rise. With the new valuation, Anduril is one of the 13 most valuable private companies in the world, according to CB Insights, and it is starting to approach the market value of some of the established defense contractors that have dominated the industry for decades—known within the defense industry as the “primes.” Anduril’s valuation is now approaching half that of Northrop Grumman and General Dynamics, two of America’s longest-standing contractors for the Department of Defense.

Anduril—started in 2017 by a group of Silicon Valley vets that include Oculus founder Palmer Luckey and Founders Fund’s Trae Stephens—was one of the first defense tech startups in Silicon Valley. Its founders sought to disrupt the traditional model of defense by privatizing the innovation process via self-funding new technologies, then selling to the government, rather than relying on tax-payer dollars for the research and development. 

As geopolitical tensions have grown around the globe, there has been renewed vigor to bolster the U.S. Navy, Army, and Air Force’s equipment and fleets. In the last few years, Anduril has been awarded a number of highly-competitive contracts for the U.S. military, including a program with General Atomics to build up to $9 billion worth of autonomous unmanned aircraft, as well as a 10-year, $642.2 million contract with the U.S. Navy to build counter-drone systems. Earlier this year, Anduril took over Microsoft’s augmented reality headset project, worth up to $22 billion, that will deliver some 120,000 headsets to the U.S. Army. Anduril said it had doubled its revenue in 2024 to $1 billion. 

Anduril has also looped other tech companies into the fold. Last week the company said it was partnering with Meta on a separate helmet and headset project.

Anduril says it will use the new billions of capital for M&A, to scale up its Arsenal-1 manufacturing facility in Ohio, hire in the U.S., Australia and Europe, and invest in new product launches.

Anduril, which had just raised $1.5 billion last summer at a $14 billioin valuation, has helped turn the defense tech industry into one of the hotter sectors in the venture capital industry. There was $3 billion invested in defense tech startups in 2024, according to Crunchbase, up 11% from the year prior. Sassie Duggleby, cofounder and CEO of reusable hypersonic technology company Venus Aerospace, said in an email that Anduril was “revolutionizing the traditional defense contracting process” and that it was “paving the way for emerging deep tech aerospace innovators like Venus.”

This story was originally featured on Fortune.com