Defense startup Hermeus has secured $350 million to advance its work on what it claims to be the “fastest unmanned aircraft,” reaching a valuation of $1 billion. The Los Angeles company announced the raise includes $200 million in equity led by Khosla Ventures, with participation from existing backers like Canaan Partners, Founders Fund, In-Q-Tel, and RTX Ventures, along with new participants such as Cox Enterprises and Destiny Tech100. The additional $150 million comes as debt financing, aimed at maintaining control as the company scales up. CEO AJ Piplica explained the rationale to finance spending non-dilutively to expand manufacturing capabilities.
The aerospace sector sees growing investments, with VC spending in defense tech surpassing $9 billion globally last year, of which corporate investors contributed $2 billion. Hermeus attributes its success partly to a strategic shift made a few years back. After engaging RTX Ventures, the company opted to work with RTX subsidiary Pratt & Whitney, modifying its F100 engine for Hermeus’ hypersonic aircraft instead of developing a new engine. This collaboration provided a reliable engine and facilitated new U.S. government contracts. Hermeus can now focus on diverse goals, boosting business economics while meeting near-term defense demands, says president Zach Shore.
Recently, Hermeus conducted a test flight of a technology demonstrator comparable in size to an F-16. The next prototype aims for supersonic speeds, with a third model underway. Piplica sees rapid prototyping, inspired by SpaceX, as vital, despite aviation challenges. Talent development remains a critical obstacle as the team approaches 300 employees. Piplica emphasized being prepared for failures, expected in the rapid prototyping approach, stressing the importance of developing multiple aircraft models to expedite progress. The new funds will support ongoing staff expansion, despite anticipating potential setbacks in aircraft testing.