Shield AI, which builds platforms and planes for autonomous flight systems for the US military and its allies, has just raised $60 million in new funding. The money will be used to keep building out its tech.
The new round comes in as an addition to the company’s existing $165 million round, which was announced back in June. That brought the company’s total funding to $225 million, giving it a current valuation of $2.25 billion. Brandon Tseng, who co-founded the firm with his brother Ryan Tseng, confirmed that this new round came in at the same price tag. This latest $60M came from a single investor: Hollywood producer Thomas Tull, who also invested in the company’s previous round.
Previous investors in Shield AI include Snowpoint Ventures, Disruptive Growth Fund, Riot Ventures, Homebrew, Point 72 Ventures, Andreessen Horowitz and Breyer Capital.
Interestingly, the company actually closed the new round a week after the last one was announced.
This is a tricky time for raising funds. Investors have tightened their purses in response to tech companies, from startups to the big boys, seeing a slowdown in revenue. Then startups finding it hard to raise money have had no choice but to cut costs to extend runway and show their backers that they have viable business ideas that can grow and be profitable. Even if they do all that, they may still run out of cash and have to close shop.
Amidst all that, defense technology has been one of the areas that has stood out, especially because of world events. Tension between nations, terrorism and war are all being played out technologically these days. This includes equipping those in combat and potentially using technology to reduce casualties.
“Military and government spending is countercyclical,” according to Tseng, in an interview TechCrunch. “When you talk to a consumer or enterprise business, spending goes down in a recession. But the government is a Steady Eddie. Modernizing the military requires a path and a plan and so it will continue to execute on that.”
All of that is why the best startups in the industry are growing fast, which has attracted investor interest.
“Automated defense capabilities will play an increasingly essential role in our defense programs and are critical to our ability to remain competitive,” according to Tull. “Shield AI is a leader in this space, developing some of the most advanced and cutting-edge technology for AI piloting. We are proud to be able to support Shield AI and the work they are doing in defense.”
Shield AI is based in San Diego, California, which we previously described in our article about the Silicon Valley of the Defense Industry. According to statistics collected by the city’ s Chamber of Commerce, outside the Washington D.C. area, greater San Diego receives more defense spending than anyplace else in the United States. Shield AI is headquartered there, along with dozens of other major and minor defense companies. The company already has a number of aircraft as well as its ‘Hivemind’ autonomous flying software on the marketplace and deployed with customers (such as the F-16 pictured above). Shield AI is also developing a variety of other projects, including vertical take off and landing (VTOL) autonomous planes, and “swarm” capabilities to jam communications or to help their customers get through when they are being jammed.