Hypersonic Missile Startup Castelion Secures $1 Billion in New Financing
Castelion, a defense-tech startup, has raised over $1 billion in new financing to expand its hypersonic missile production and develop a broader portfolio of offensive and defensive weapons.
A hypersonic missile startup has secured a significant funding boost to accelerate its production and development of new weapons systems.
The Series C financing announced by Castelion includes $800 million in equity and a $250 million committed revolving credit facility. This round of funding values the four-year-old startup at $13 billion.
The company plans to use the funding to expand production of its Blackbeard hypersonic strike missile at its manufacturing complex in Sandoval County, New Mexico. It will also accelerate work on a longer-range precision strike weapon and defensive systems for air and missile defense.
Castelion is betting on the Pentagon's drive to produce missiles and other munitions faster and in much larger quantities after recent conflicts exposed strains in U.S. weapons stockpiles and manufacturing capacity.
The Defense Department has sought to bring new suppliers into a market long dominated by traditional defense contractors. Castelion's co-founder and chief executive, Bryon Hargis, said in a statement, "There's a manufacturing renaissance underway and this round turbocharges American production of Blackbeard."
Castelion was founded in 2022 by three former SpaceX executives. The company has sought to apply elements of SpaceX's development model to missile production, including vertical integration, frequent hardware testing, and designing products for high-rate manufacturing.
| Series | Equity | Revolving Credit Facility |
|---|---|---|
| C | $800 million | $250 million |
The company has secured more than $500 million in U.S. military contracts over the past 18 months. The initial fielding of Blackbeard is targeted for 2027.
The U.S. Navy has emerged as Castelion's main customer. It awarded the company about $50 million in February to advance Blackbeard toward an early operational capability, followed in April by a roughly $105 million award to integrate, test, and certify the weapon on the F/A-18E/F Super Hornet.
In June, the Navy placed a $23.4 million firm-fixed-price order for 50 pre-production Blackbeard weapons and 50 shipping and storage containers.
Blackbeard still faces integration, flight testing, and certification before reaching the operational fielding Castelion is targeting for next year. The company also has yet to demonstrate that it can sustain the production rates and costs it is promising as manufacturing moves beyond prototypes.
The Pentagon in May signed a framework agreement with Castelion contemplating a two-year Blackbeard production contract with a minimum production rate of 500 missiles annually following successful testing and validation.
Blackbeard is expected to cost roughly $384,000 per missile, compared with millions or tens of millions of dollars for some existing U.S. hypersonic weapons. Achieving that price at scale could significantly change the economics of long-range hypersonic strike and allow the Pentagon to procure the weapons in much larger quantities.
The funding will also be used to accelerate work on a longer-range precision strike weapon and defensive systems for air and missile defense.
