Shield AI secures USD2b funding at a USD12.7b valuation
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The news: Defence startup Shield AI has raised USD2 billion ($2.89 billion) in its latest funding, more than doubling its valuation from 12 months ago.
The numbers: The startup said the funding comprised of USD1.5 billion in a Series G round, giving the company a USD12.7 billion valuation, as well as USD500 million fixed-return preferred equity financing.
Funds managed by Blackstone are investing the USD500 million of preferred equity financing, as well as committing an additional USD250 million delayed draw facility to support future growth.
The context: The Series G was led by Advent International and the Strategic Investment Group of JPMorgan Chase’s Security and Resiliency Initiative, with existing investors Snowpoint Ventures, InnovationX, Riot Ventures, Disruptive, Apandion, and others also participating.
Under the deal, Advent’s chairman David Mussafer will join Shield AI’s board of directors and JPMorgan Chase’s Todd Combs will join as a board observer.
Shield AI produces AI-powered software to help run autonomous vehicles and drones, taking a similar strategy to that adopted by Anduril which markets its products as tools to modernise the military. The company said that some of the funding will go towards the company’s planned acquisition of Aechelon Technology, which develops simulation software for militaries to train pilots and test advanced aircraft and autonomous systems before live flight.
Aechelon will join Shield AI post-closing, but will continue to operate independently. Aechelon co-founder and CEO Ignacio (Nacho) Sanz-Pastor will report directly to Gary Steele and remain responsible for Aechelon’s product and customer roadmap.
Morgan Stanley served as exclusive financial adviser to Shield AI on the financing package to consummate the transaction, Sidley Austin served as legal adviser to Shield AI on the acquisition of Aechelon.
What they said: Shield AI CEO Gary Steele said: “The acquisition of Aechelon will accelerate the work we are doing with Hivemind, particularly in simulation like the Department of War’s JSE. It’s an incredible company with a fantastic team and a leading technology that plays a role in how we think about the AI pilot development lifecycle.”
“Through our Security and Resiliency Initiative, we are investing in generational companies who are poised to accelerate innovation, reinforce the defense industrial base, and help advance and scale mission-critical solutions,” said Todd Combs, head of the Strategic Investment Group for JPMorgan Chase’s Security and Resiliency Initiative.
The source: Shield AI press release
