Shield AI agreed to buy Echodyne, which makes radars for counter-drone systems, for $5.3B. It is raising $2.5B in equity and debt to fund the deal, at a $28.8B valuation. Shield wants Echodyne to help it sell beyond the military, to areas like public safety.
Shield AI has agreed to buy radar maker Echodyne for $5.3B and is raising $2.5B to help pay for it, the defence tech startup said on Thursday. The deal values Shield at $28.8B, more than double what it was worth in March, Bloomberg reported.
The money includes a $1B Series H co-led by Disruptive and Innovation X Capital, $1B of structured equity from Blackstone funds and $500M of debt from JPMorgan. Disruptive closed a $10B fund last month to make large bets on late-stage AI and defence companies.
Shield will pay $4.8B when the deal closes, plus up to $500M more if Echodyne hits performance targets. It expects to close in early 2027, and the new funding only goes ahead if it does.
Echodyne, based in Kirkland, Washington, makes compact radars used in counter-drone and security systems in more than 40 countries. Its customers include the US military.
Shield makes Hivemind, AI software that flies military aircraft on its own, and the V-BAT surveillance drone. It is also building X-BAT, an AI-piloted fighter jet that takes off vertically. Chief executive Gary Steele said this week it would fly for the first time before the end of the year.
Echodyne is Shield’s first step into “” hardware that can also be sold outside the military, Steele told Bloomberg. So far, all of Shield’s end users have been governments.
“Think about public safety, whether it’s the Super Bowl or FIFA, just literally every single thing is going to need protection from drones,” Steele said.
Shield has raised $5.4B in equity so far, from backers including Andreessen Horowitz and Point72. Its staff has more than doubled in a year to nearly 2,300. Defence tech valuations are climbing fast: rival Anduril is now valued near $90B, and drone maker Mach Industries nearly quadrupled its value in June.
Steele said he was not worried that Democrats winning both houses of Congress could mean more scrutiny of defence spending.
“Even with the midterms, I think there will be a common view of what needs to be done on defense,” he said.