Shield AI To Hit $28.8 Billion Value With $5.3 Billion Radar Acquisition

Shield AI is buying a radar company for $5.3 billion, and raising $2.5 billion in new funding for it, the company plans to announce on Thursday.The new backing, which Shield AI is raising to support the acquisition, includes $1 billion in Series H funding at a $28.8 billion valuation. That’s more than double the valuation the startup struck earlier this year, when it raised $2 billion at a $12.7 billion value in March. The remainder of the $2.5 billion consists of $1 billion in structured equity financing provided by Blackstone Inc. and $500 million in debt from JPMorgan Chase & Co.

The defense tech startup, which makes autonomous aircraft systems for militaries, is set to acquire Echodyne Corp., which sells radar sensors to government and commercial customers. The deal includes $4.8 billion in cash and equity, as well as an additional $500 million that is conditional on Echodyne hitting certain milestones, according to Shield.

The $2.5 billion financing will be completed when the acquisition closes and won’t proceed if the deal falls through, Shield said.

Echodyne is Shield’s fifth acquisition and its second this year. In June, the company bought visual simulation company Aechelon Technology Inc. As Shield supports military operations in regions such as Ukraine and Iran, it’s weighing long-term ambitions to expand into more areas beyond defense like public safety.

Founded in 2015, Shield sells an AI-enabled software system to US and allied militaries called Hivemind, which powers aircraft for autonomous missions. It also makes a drone for surveillance and reconnaissance called the V-BAT. This week, the company unveiled its second-ever aircraft design, an autonomous fighter jet called the X-BAT.

Chief Executive Officer Gary Steele said at a Bloomberg Tech event in London on Tuesday that Shield plans to conduct its first X-BAT test flight before the end of the year and to start production in 2029 or 2030. The company plans to raise more than $1 billion early next year to fund that production, Steele said. Shield has already committed $200 million to the jet’s development, alongside a $200 million commitment by the US Navy.

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The startup has surged as venture capital firms pour money into defense tech. Shield AI has raised $5.4 billion in equity capital to date, from backers including Andreessen Horowitz and Point72 Ventures. Bloomberg Beta, the venture firm backed by Bloomberg LP, has also invested in Shield.

Shield AI has more than doubled its headcount in the past year to nearly 2,300 employees, Steele said, and expects to more than double its revenue in the current fiscal year ending March 2027.

While Shield has some partnerships with commercial entities, the startup has exclusively served government end users to date, Steele said in an interview. Successful operations involving Shield’s technology in countries including Taiwan and India have drawn in more international governments as customers, Steele said, adding that more than half of the company’s current revenue today comes from international markets.

The acquisition of Kirkland, Washington-based Echodyne marks Shield AI’s first steps into “dual-use” hardware, Steele said, citing the radar company’s growth in powering counter-drone technologies, including for the US military, as well as its work in commercial security systems. Steele said Echodyne’s tech, and its customer base, will serve as something of a foundation for Shield’s future work beyond military applications.

“Think about public safety — whether it’s the Super Bowl or FIFA, just literally every single thing is going to need protection from drones,” he said. He also highlighted commercial aviation as an area of interest for Shield’s future expansions.

While President Donald Trump has significantly expanded the US military’s spending on defense technologies in his second term, some have posited that Tuesday’s midterm elections in the US, which saw both the House of Representatives and the Senate flip to majority Democratic Party control, could result in more oversight or even cuts.

Steele said at the Bloomberg Tech event on Tuesday morning that Shield wasn’t concerned about how the results of the election might affect its business. “Even with the midterms, I think there will be a common view of what needs to be done on defense,” he said.