Defense startup Shield AI has raised $2 billion in its latest funding round after investors saw how crucial AI and autonomous tools like drones have been in the current Iran war.
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Shield is Now Valued at $12.7B
Shield AI raised $1.5 billion in the new Series G funding round, which was led by private equity firm Advent International. It was co-led by JPMorganChase’s (JPM) Strategic Investment Group, with participation from existing investors including Snowpoint Ventures and Riot Ventures. It is now valued at $12.7 billion.
Shield AI said Blackstone (BX)-managed funds are investing an additional $500 million in preferred equity as part of the financing, while also committing an additional $250 million delayed draw facility that could bring its total investment to $750 million.
The importance of AI-powered software and autonomous tools such as drones in warfare have been shown during the recent conflict between the U.S., Israel and Iran, as well as the much longer war between Ukraine and Russia.
Shield AI’s Hivemind software allows drones and aircraft to operate in GPS-denied environments and has been tested on several platforms, including the F-16 fighter jets and the U.S. Air Force’s uncrewed weapon system called Collaborative Combat Aircraft.
Shield Acquiring Aechelon
Shield AI plans to use a portion of the funds to buy simulation software maker Aechelon Technology from private equity firm Sagewind Capital, it said, without disclosing financial terms of the deal. Aechelon is a defense software company known for its high-fidelity simulation, physics-based sensors, and synthetic reality applications. Aechelon’s technology is used by the U.S. military and allies to train pilots and test advanced aircraft and autonomous systems before live flight.
“The acquisition of Aechelon will accelerate the work we are doing with Hivemind, particularly in simulation like the Department of War’s JSE (Joint Simulation Environment),” Shield AI CEO Gary Steele said.
The JSE is a high-fidelity virtual combat range used by the U.S. military to test aircraft, autonomous systems and tactics against realistic battlefield threats.
Advent’s David Mussafer said of its decision to lead the investment, “Shield AI is a rare asset with the potential to deliver strong growth over the coming years.”
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