U.S. defense technology startup Shield AI plans to acquire radar sensor maker Echodyne in a deal valued at up to $5.3 billion, while raising $2.5 billion in new financing. The funding values Shield AI at $28.8 billion—more than double its $12.7 billion valuation in a March financing round—as investors commit more capital to defense technology companies.
Deal includes $4.8 billion upfront and $500 million tied to milestones
Shield AI said the consideration comprises $4.8 billion in cash and equity, plus an additional $500 million contingent on Echodyne meeting specified milestones. Echodyne sells radar sensors to government and commercial customers. Following the acquisition, its radar business is expected to be integrated with Shield AI’s autonomous aircraft systems developed for military use.
The acquisition adds sensor technology to Shield AI’s product portfolio. Radar sensing is relevant to autonomous aviation systems used by defense customers, though further details on the integration plan and the milestone conditions have not been disclosed.
$2.5 billion financing will support the acquisition
Shield AI’s new financing consists of three parts: a $1 billion Series H round at a $28.8 billion valuation, $1 billion in structured equity financing from Blackstone Inc., and $500 million in debt financing from JPMorgan Chase & Co. The company plans to use the proceeds to support the acquisition.
In March, Shield AI raised $2 billion at a $12.7 billion valuation. Its latest valuation is more than twice that level. The size and structure of the financing also show the company drawing on both equity and debt as it pursues a large acquisition. For investors tracking defense technology, the valuation and funding mix offer a clearer picture of the capital involved and the company’s financing needs.
Led by CEO Gary Steele, Shield AI focuses on autonomous aircraft systems for military use. Echodyne serves both government and commercial customers. The final deal value will depend on the transaction’s terms, including the $500 million payment tied to Echodyne reaching specified milestones.