Palmer Luckey’s Defense Startup Anduril Raises $1.5B, Valued At $7B

  • General
  • December 2, 2022
  • 2410
  • 4 minutes read
Palmer Luckey
Palmer Luckey

Anduril Industries, a defense startup co-founded by Palmer Luckey, has raised a $1.5bn Series E round that gives it a $7bn pre-money valuation. The investment represents the second-biggest venture capital round for an American startup so far in 2022.

Palmer Luckey is best known as the founder of Oculus, the virtual reality company that Meta (formerly Facebook) acquired for $3bn in 2014. After selling Oculus, he remained at Facebook for several years before getting fired in 2017 amid controversy about his political donations. In that same year, he teamed up with an early employee of Oculus and three alumni of Palantir Technologies to launch Anduril.

  • Anduril’s Series E round was led by Valor Equity Partners, an existing investor, with participation from many others including Founders Fund, Andreessen Horowitz, Thrive Capital, and Thomas Tull’s US Innovative Technology Fund. Including the new round, Anduril has raised a total of $1.9bn from VCs.

What Does Anduril Do?

Anduril sells surveillance and weapons systems to the U.S. military and its allies. For example, it has surveillance towers and software deployed at the US-Mexico border and some US military bases. This January, the company won a $970mn contract to supply unmanned aerial systems for the U.S. special operations forces (SOF). Another major Anduril customer is the Australian Navy, which awarded the company a $100mn contract to build unmanned undersea surveillance vehicles.

In retrospect, Anduril is an upstart challenger seeking to bite a considerable slice of the lucrative global defense market. It’s booming at a strategic time wherein the Russia-Ukraine war has prompted the U.S. and its allies to increase defense spending.

The Outlook

With a steady stream of government contracts, Anduril seems like an attractive bet for venture capitalists such that it raised $1.5bn in a year when VC funding has plunged over 50% compared to the previous year. The only American company that has raised a bigger round this year is Elon Musk’s SpaceX— $1.7bn according to a June SEC filing. Anduril and SpaceX share common investors including Valor Equity Partners and Peter Thiel’s Founders Fund.

Anduril says it currently has over 1,100 employees compared to 700 at the beginning of 2022. $1.5bn is ample capital for the company to continue to expand and invest in new products like its Altius loitering munition drones.

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