Hermeus, a defence startup based in Los Angeles, has successfully secured $350 million in funding to further develop what it dubs the “fastest unmanned aircraft,” raising its valuation to $1 billion. The funding round included $200 million in equity financing spearheaded by Khosla Ventures, with contributions from existing investors such as Canaan Partners, Founders Fund, In-Q-Tel, and RTX Ventures, alongside new investors from Cox Enterprises and Destiny Tech100.
The remaining $150 million raised comes as debt financing. Hermeus co-founder and CEO AJ Piplica emphasised that this financial strategy allows the startup to expand its manufacturing capabilities while minimising dilution of control among investors. Piplica stated, “We build a lot of hardware… if we can finance a large portion of our spend non-dilutively, it’s absolutely the way to do it.”
This funding surge occurs amid a broader trend where investment in defence technology startups has reached over $9 billion globally, driven by venture capital interest. Hermeus’s fundraising success is not only due to market conditions but also strategic shifts within the company. A few years back, they pivoted from developing their engine to collaborating with Pratt & Whitney, a subsidiary of RTX Corporation. This partnership enables Hermeus to adapt existing technology for their hypersonic aircraft, thereby accelerating development and easing testing processes, while concurrently securing new government contracts.
Hermeus has ambitious goals, aiming to develop aircraft capable of reaching Mach 5 speeds while catering to the Department of Defense’s immediate needs. This strategy allows the company to diversify its goals rather than focus solely on one large project. “This accelerates us to Mach 5… while satisfying near term demand,” said Hermeus President Zach Shore, highlighting the interconnectedness of business growth and technological advancement.
The company recently completed a successful flight test of a demonstrator that mimics the size of an F-16 fighter. Future iterations are expected to achieve supersonic speeds, with plans for a third aircraft underway. Piplica believes that this rapid prototyping approach is necessary for innovation in aviation, likening it to the practices of SpaceX.
However, he acknowledged the critical challenge of acquiring talent necessary to support such ambitious projects, noting, “There’s nowhere in the world where companies are building new full-scale aircraft on an annual basis.” The new funds will assist in expanding Hermeus’s workforce, which is nearing 300 employees.
While the company has achieved two successful test flights, Piplica is aware of the risks involved in rapid development, underscoring that failure is an expected part of the learning process. “We’re set up to do that very safely,” he stated, reflecting on the need for multiple test aircraft to streamline their development timeline. Ultimately, Hermeus stands at the intersection of innovation and defence, poised to redefine the boundaries of aviation technology.
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