(Bloomberg) — Defense startup Shield AI has finalized a deal to raise $240 million from investors at a valuation of $5.3 billion — a funding round that adds billions to the company’s valuation, and underscores Silicon Valley investors’ interest in drones, autonomy and national security technology.
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The San Diego-based startup plans to use the cash infusion to expand its software offerings. Variations of Shield AI’s Hivemind software can pilot autonomous vehicles as well as help companies build their own autonomous drones, robots and other systems.
Investors in the deal include aerospace and defense company L3Harris Technologies Inc. and South Korean aerospace company Hanwha Aerospace Co. — along with Andreessen Horowitz, US Innovative Technology and Washington Harbour. Bloomberg Beta, the venture capital arm of Bloomberg LP, is also an investor. Some details of the round were previously reported by the Information.
Shield AI is most famous for its drone, called V-BAT, capable of vertical takeoff and landing. One is prominently displayed in its San Diego offices. But going forward, the company wants to be known for its software.
“This next phase is really about working with the small and medium businesses” that want to operate autonomous hardware across air, land or sea, Shield AI co-founder Brandon Tseng said. “We’ve spent a decade and $1 billion-plus building this.”
Shield AI was founded by Tseng, a former Navy Seal, and his brother Ryan Tseng, an engineer and former technical lead at Qualcomm Inc., who is now the startup’s chief executive officer. Shield AI is one of dozens of defense startups to emerge in recent years with enthusiastic backing from venture capitalists. Investors have poured record amounts into AI, space weapons and other defense technologies, hoping the Pentagon will increase its tech spending as modern warfare evolves.
ShieldAI’s Hivemind software aims to make it easier for more developers and businesses to create autonomous hardware. The company’s tools can also help pilot autonomous vehicles ranging from one-way attack drones to F-16s, and support swarming operations. Shield says its software can allow vehicles to execute complex missions autonomously, including when GPS and communications are jammed.