Confidential - Do not share without permission
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Confidential - Do not share without permission
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Performance
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Anduril are shaping the future of defense, transforming US & allied military capabilities with advanced technology.
Memo Highlights
Round
Secondary
Investors
Founders Fund, Andreessen Horowitz, Valor Equity Partners , 8VC , DFJ Growth, General Catalyst, Lux, Spark
Date
18 Dec
Questions
team@joinbeyond.coConfidential
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Deck only available via Desktop
Highlights
We’ve very excited to be investing in Anduril, a very difficult company to access and one we have waited all year to secure. This is the lowest share price we've seen and also the best access point.
Anduril has been directly disrupting defense primes such as Raytheon ($155B) and Lockheed Martin ($120B). The current defense market is primed for change as contractors are paid more when they fail to meet time and spend requirements. The biggest market change is coming from the new US administration and its direct involvement on defense contracts and focus on efficiency (see Anduril’s view on defense spending). We believe this will massively impact Anduril’s growth. We have also heard Anduril is planning a large round for defense acquisitions, which could significantly increase their valuation. We’ve seen a similar path recently with SpaceX (valuation jumping to $350B) by making costs up to 1000x lower in their field. We believe Anduril will become the largest single vendor for the US military and its allies, displacing incumbents with a radically new approach to building and selling defense products.
Backed by Andreessen and Founders Fund, Anduril is a next generation defense technology company. Competitive advantage in warfare, today and in the future, depends more on superior information and intelligence than on weapons superiority. Anduril brings together the brightest engineering and policy minds from Silicon Valley and Washington DC to address the needs of the modern military.
Analysts estimate Anduril generated $350M - $400M in revenues in 2023 and are projecting $1B revenue in 2024. This year, Anduril has been winning massive contract after contract and shipping multiple next gen systems quickly, including: Air Force selecting Anduril to build Collaborative Combat Combat Aircraft, Ghost Shark submarine for Royal Australian Navy, Pulsar Family of AI-enable electromagnetic warfare systems, and continuing to execute on $1B contract from the Department of Defense for counter-unmanned systems. Andruil is uniquely positioned to deliver best-in-class integrated hardware and software systems that outclass legacy defense contractors’ offerings.
Anduril recently closed a $1.5B Series F. The Series F was led by Founders Fund (SpaceX, Palantir) + Sands Capital (Slack, UiPath). Existing investors including Andreessen Horowitz (Airbnb, Coinbase), Valor Equity Partners (Addepar, BitGo), 8VC (Oculus, Palantir), DFJ Growth (Unity, Coinbase), General Catalyst (Snap, Cadre), Lux Capital (Matterport, Saildrone), Spark Capital (Oculus, Plaid), among others.
$2T Market: Anduril is pointing at the massive $2T/year global military market. The military industrial complex has scarcely changed since the end of the Cold War. Military leaders in the US and its allies are realizing that our adversaries are pulling ahead in emerging fields like AI, computer vision, and robotics. While other Silicon Valley tech companies avoid working on defense, Anduril brings together the best and brightest engineers to work on national security issues using 21st century technology.
Timing is Now: Geopolitical instability has increased demand for Anduril's products. The conflict in Ukraine and the Middle East is a preview of the software-defined conflicts of tomorrow, where parties with an enormous material advantage cannot overcome the advantages of superior information and intelligence. Anduril is focused on building the autonomous systems, sensor-enabled command networks, and machine-speed combat capabilities that are rendering last century’s technology obsolete. The Biden administration submitted a record-breaking $813B defense budget for 2023, and geopolitical trends will likely increase this number even further, regardless of recession or other economic factors. Much of this spending will go to modernization efforts that Anduril is well-positioned to service.
Innovative Technologies: Unlike traditional defense contractors who focus primarily on hardware, Anduril’s software stack, known as Lattice OS, provides an autonomous command and control platform for security critical operations. Recently several branches of the Armed Forces have requested integrations with non-Anduril products. As Anduril builds out these integrations, the high margin Lattice OS platform will increasingly put the company in a strong strategic position, becoming more integral to the operations of the modern military and creating unique expansion opportunities.
Notable Comps: Anduril is more than a surveillance and perception company: it is the next major defense prime contractor. Traditional defense primes are still growing at strong rates after decades of existence. The four major primes, their market caps, and 2024 revenue figures are:
Strong Business Model: Legacy prime contractors use a cost-plus business model which continues to prove grossly inefficient. Similar to SpaceX, Anduril finances its own R&D and sells off-the-shelf resulting in better unit economics and positioning the company well as the government shifts towards fixed-cost contracts. This is not to say that legacy primes can't change, but the infrastructure and expertise required is innate to Anduril and will take years for the incumbents to develop.
Scaling Traction: Anduril is growing quickly. Analysts estimate Anduril generated $350M - $400M in revenues in 2023 and are projecting $1B revenue in 2024. . They continue to execute on their $1B contract from the Department of Defense for counter-unmanned systems.
Use of Funds: The company plans to use the funding from this round to meet the increased demand for its suite of products as well as M&A activity. Recently the company acquired Dive Technologies, a pioneer in autonomous underwater vehicles. Expanding the company's capabilities underwater has opened up several substantial Navy contracts. The brand and sales relationships Anduril has built enable them to acquire startups working on promising technology and rapidly commercialize them, opening up exciting new revenue streams.
Experienced Leadership Team: The leadership team is a mix of former Silicon Valley executives, government officials, lobbyists, and high-ranking military veterans. Twenty percent of the Anduril team are military veterans and use their experience to ensure the products meet the needs of servicemen and women in the field. Palmer Luckey (Founder) previously founded Oculus, acquired by Facebook in 2014 for $3B - here is a great interview with him at Bloomberg Tech. Brian Schimpf (Co-founder/CEO) was previously the Director of Engineering at Palantir ($16B). Trae Stephens (Co-founder/Chairman) is a Partner at Founders Fund and early employee at Palantir. Matt Grimm (Co-founder/COO) was previously Principle at Mithril Capital Management and an early employee at Palantir. And Joseph Chen (Co-founder) was one of the first employees at Oculus.
Tier 1 Investors: The Series F was led by Founders Fund (SpaceX, Palantir) + Sands Capital (Slack, UiPath) with participation from existing investors including Andreessen Horowitz (Airbnb, Coinbase), Valor Equity Partners (Addepar, BitGo), 8VC (Oculus, Palantir), DFJ Growth (Unity, Coinbase), General Catalyst (Snap, Cadre), Lux Capital (Matterport, Saildrone), Spark Capital (Oculus, Plaid), among others.
Please see further info on products, team, market from Contrary's research.
Memo
We’ve very excited to be investing in Anduril, a very difficult company to access and one we have waited all year to secure. This is the lowest share price we've seen and also the best access point.
Anduril has been directly disrupting defense primes such as Raytheon ($155B) and Lockheed Martin ($120B). The current defense market is primed for change as contractors are paid more when they fail to meet time and spend requirements. The biggest market change is coming from the new US administration and its direct involvement on defense contracts and focus on efficiency (see Anduril’s view on defense spending). We believe this will massively impact Anduril’s growth. We have also heard Anduril is planning a large round for defense acquisitions, which could significantly increase their valuation. We’ve seen a similar path recently with SpaceX (valuation jumping to $350B) by making costs up to 1000x lower in their field. We believe Anduril will become the largest single vendor for the US military and its allies, displacing incumbents with a radically new approach to building and selling defense products.
Backed by Andreessen and Founders Fund, Anduril is a next generation defense technology company. Competitive advantage in warfare, today and in the future, depends more on superior information and intelligence than on weapons superiority. Anduril brings together the brightest engineering and policy minds from Silicon Valley and Washington DC to address the needs of the modern military.
Analysts estimate Anduril generated $350M - $400M in revenues in 2023 and are projecting $1B revenue in 2024. This year, Anduril has been winning massive contract after contract and shipping multiple next gen systems quickly, including: Air Force selecting Anduril to build Collaborative Combat Combat Aircraft, Ghost Shark submarine for Royal Australian Navy, Pulsar Family of AI-enable electromagnetic warfare systems, and continuing to execute on $1B contract from the Department of Defense for counter-unmanned systems. Andruil is uniquely positioned to deliver best-in-class integrated hardware and software systems that outclass legacy defense contractors’ offerings.
Anduril recently closed a $1.5B Series F. The Series F was led by Founders Fund (SpaceX, Palantir) + Sands Capital (Slack, UiPath). Existing investors including Andreessen Horowitz (Airbnb, Coinbase), Valor Equity Partners (Addepar, BitGo), 8VC (Oculus, Palantir), DFJ Growth (Unity, Coinbase), General Catalyst (Snap, Cadre), Lux Capital (Matterport, Saildrone), Spark Capital (Oculus, Plaid), among others.
$2T Market: Anduril is pointing at the massive $2T/year global military market. The military industrial complex has scarcely changed since the end of the Cold War. Military leaders in the US and its allies are realizing that our adversaries are pulling ahead in emerging fields like AI, computer vision, and robotics. While other Silicon Valley tech companies avoid working on defense, Anduril brings together the best and brightest engineers to work on national security issues using 21st century technology.
Timing is Now: Geopolitical instability has increased demand for Anduril's products. The conflict in Ukraine and the Middle East is a preview of the software-defined conflicts of tomorrow, where parties with an enormous material advantage cannot overcome the advantages of superior information and intelligence. Anduril is focused on building the autonomous systems, sensor-enabled command networks, and machine-speed combat capabilities that are rendering last century’s technology obsolete. The Biden administration submitted a record-breaking $813B defense budget for 2023, and geopolitical trends will likely increase this number even further, regardless of recession or other economic factors. Much of this spending will go to modernization efforts that Anduril is well-positioned to service.
Innovative Technologies: Unlike traditional defense contractors who focus primarily on hardware, Anduril’s software stack, known as Lattice OS, provides an autonomous command and control platform for security critical operations. Recently several branches of the Armed Forces have requested integrations with non-Anduril products. As Anduril builds out these integrations, the high margin Lattice OS platform will increasingly put the company in a strong strategic position, becoming more integral to the operations of the modern military and creating unique expansion opportunities.
Notable Comps: Anduril is more than a surveillance and perception company: it is the next major defense prime contractor. Traditional defense primes are still growing at strong rates after decades of existence. The four major primes, their market caps, and 2024 revenue figures are:
Strong Business Model: Legacy prime contractors use a cost-plus business model which continues to prove grossly inefficient. Similar to SpaceX, Anduril finances its own R&D and sells off-the-shelf resulting in better unit economics and positioning the company well as the government shifts towards fixed-cost contracts. This is not to say that legacy primes can't change, but the infrastructure and expertise required is innate to Anduril and will take years for the incumbents to develop.
Scaling Traction: Anduril is growing quickly. Analysts estimate Anduril generated $350M - $400M in revenues in 2023 and are projecting $1B revenue in 2024. . They continue to execute on their $1B contract from the Department of Defense for counter-unmanned systems.
Use of Funds: The company plans to use the funding from this round to meet the increased demand for its suite of products as well as M&A activity. Recently the company acquired Dive Technologies, a pioneer in autonomous underwater vehicles. Expanding the company's capabilities underwater has opened up several substantial Navy contracts. The brand and sales relationships Anduril has built enable them to acquire startups working on promising technology and rapidly commercialize them, opening up exciting new revenue streams.
Experienced Leadership Team: The leadership team is a mix of former Silicon Valley executives, government officials, lobbyists, and high-ranking military veterans. Twenty percent of the Anduril team are military veterans and use their experience to ensure the products meet the needs of servicemen and women in the field. Palmer Luckey (Founder) previously founded Oculus, acquired by Facebook in 2014 for $3B - here is a great interview with him at Bloomberg Tech. Brian Schimpf (Co-founder/CEO) was previously the Director of Engineering at Palantir ($16B). Trae Stephens (Co-founder/Chairman) is a Partner at Founders Fund and early employee at Palantir. Matt Grimm (Co-founder/COO) was previously Principle at Mithril Capital Management and an early employee at Palantir. And Joseph Chen (Co-founder) was one of the first employees at Oculus.
Tier 1 Investors: The Series F was led by Founders Fund (SpaceX, Palantir) + Sands Capital (Slack, UiPath) with participation from existing investors including Andreessen Horowitz (Airbnb, Coinbase), Valor Equity Partners (Addepar, BitGo), 8VC (Oculus, Palantir), DFJ Growth (Unity, Coinbase), General Catalyst (Snap, Cadre), Lux Capital (Matterport, Saildrone), Spark Capital (Oculus, Plaid), among others.
Please see further info on products, team, market from Contrary's research.