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Defense technology startup Covenant announced Wednesday it will open a 105,000-square-foot factory in Dallas to accelerate production of low-cost missiles for the U.S. military.
The startup, which is coming out of stealth with backing from Andreessen Horowitz, Peter Thiel’s Founders Fund, Lux, 8VC, Aleph, and Lightspeed, also announced $250 million in three rounds of funding.
“What we’re seeing now is an understanding that new market entrants can play an important role in the defense ecosystem, and we’re seeing that with this administration,” Abby Denberg, Covenant’s president and chief growth officer, told CNBC’s Morgan Brennan.
Created in 2024, Covenant’s long-range heavy-load cruise missile Anthem provides the U.S. military with a new option in a class of weapons dominated by defensive primes, such as the RTX Tomahawk. Covenant said Anthem costs a fraction of traditional systems.
The company announced that its Dallas plant will produce 1,000 Anthem long-range missiles in the first year, with serial production expected to begin in the first quarter of 2027 and eventually scale up to 5,000 missiles per year.
The production is desperately needed as the Iran war enters its seventh month and the U.S. weapons stockpile rapidly dwindles, according to multiple reports.
Denberg pointed to the need for high-tech weapons systems and the growth of “short-range, low-payload” drones, which emerged during the Russia-Ukraine war.
“There’s a gap between affordable mass and strategic range, and that’s the gap that Anthem was filling,” Denberg said, adding that the company wanted to reduce costs without sacrificing payload.
The company also announced two agreements with the Department of Defense on Wednesday. One would accelerate testing and certification programs with the Army, and the other would allow the Navy and the national anthem to be used “at sea.”
Covenant currently operates production facilities in Germany and northern Israel. The company has more than 200 employees worldwide.
The Washington-based startup is another example of defense technology’s growing influence in capital and role in reshaping policy and procurement.
paypal and Palantir Founder Thiel saw his influence in Washington soar with the election of President Donald Trump. Mr. Thiel supported Mr. Trump’s presidential bid in 2016 and supported J.D. Vance’s candidacy for the Senate in 2022. Mr. Vance previously worked at Mithril Capital, the venture capital firm co-founded by Mr. Thiel.
Marc Andreessen, a prominent venture capitalist who rose to prominence during President Trump’s second term, was named to the Pentagon’s Defense Policy Board this summer, along with Teal Capital’s Blake Masters.
This year, Mr. Andreessen also announced a multibillion-dollar fund dedicated solely to U.S. aerospace and defense.
