Defense technology startup Shield AI has expanded its latest funding round with another $300 million in equity and debt, bringing its Series F total to $500 million, according to TechCrunch exclusively.
That total reflects $200 million in equity that closed in November, $100 million in new equity capital raised in the Series F price, and $200 million in debt. The debt provider is Hercules Capital. Shield declined to identify the source of the additional equity. The company’s valuation now stands at $2.8 billion, up from $2.7 billion in November.
Shield AI is building an “AI pilot” to turn aircraft into autonomous systems. Its flagship product, Hivemind, will allow groups of aircraft to operate independently of remote controls, communications or GPS. Shield CEO and co-founder Ryan Tseng credits the ability to recent developments in IT.
“AI pilots are becoming a strategic conventional deterrent in class with our aircraft carriers and guided-missile submarines,” he said in a statement. “But interestingly, it is the first software-defined strategic deterrent and has only recently been made possible by advances in artificial intelligence and computing power. This is a huge paradigm shift for aerospace and defense.”
While business debt gets a bad rap, it can make a lot of sense—especially for later-stage companies that need an injection of capital to get to the finish line (like going profitable or exiting). As opposed to being a last-ditch survival mechanism for companies in trouble (as it can sometimes be for early-stage startups), late-stage venture debt can be a smart way to capitalize a growing company at the end of stage.
The San Diego-based company recently released V-BAT Teams, a software product that works with Hivemind and allows teams of V-BAT drones to conduct missions autonomously and in coordination.
In recent testimony before the US Senate, president and co-founder Brandon Tseng highlighted the importance of AI-piloted systems to the nation’s overall deterrence strategy, saying: “We believe AI-piloted systems will be the greatest military deterrent of the generation us. We have to do it right.” But he added that integrating AI pilots into the DOD’s force structure has been “difficult and murky.”
“As we see new types of warfare, where the large, highly military arsenals we have built may be outgunned by small, cheaply made adversary weapons, we need the Department of Defense to change the way it builds its force for the future: changing the paradigm from what has worked in the past and focused its resources on the next game-changing technological advantages,” he said. “Adopt AI pilots too late and we will fail. Bold actions are required if we are to win.”
