Shield AI, the San Diego defense company behind the Hivemind autonomy software, agreed to buy Kirkland, Washington radar maker Echodyne in a transaction valued at $5.3 billion. Shield is funding the deal with a $2.5 billion capital raise that includes Series H equity at a $28.8 billion post-money valuation.
Under the definitive agreement, $4.8 billion will be paid and issued at closing, with up to $500 million more contingent on Echodyne meeting agreed performance targets. The companies did not say how the consideration splits between cash and stock. Closing is expected in early 2027, subject to regulatory approvals and other customary conditions.
The $2.5 billion raise has three parts: $1 billion of Series H equity, $1 billion of structured equity from funds managed by Blackstone, and $500 million of debt financing with JPMorgan Chase Bank as sole arranger. Disruptive and Innovation X Capital co-led the Series H, joined by Advent, the Strategic Investment Group of JPMorganChase's Security and Resiliency Initiative, Snowpoint Ventures, Apandion and Center15 Capital. Shield said the Series H proceeds will be used principally to fund the acquisition.
Key facts
- 01Shield AI agreed to acquire Echodyne in a transaction valued at $5.3B, with $4.8B paid at closing.
- 02Up to $500M more is contingent on Echodyne meeting agreed performance targets.
- 03A $2.5B raise backs the deal: $1B Series H at $28.8B post-money, $1B Blackstone structured equity, $500M JPMorgan-arranged debt.
- 04Disruptive and Innovation X Capital co-led the Series H; closing is expected in early 2027.
- 05Echodyne's MESA radars are used in counter-drone and security systems in more than 40 countries.
The new valuation is more than double what Shield was worth in March. The company has raised $5.4 billion in equity to date from backers including Andreessen Horowitz and Point72, and its headcount has more than doubled in a year to nearly 2,300.
Echodyne designs and manufactures compact, solid-state radars built on its patented Metamaterials Electronically Scanned Array, or MESA, technology. Its radars sit inside hundreds of counter-drone and security systems used by defense, government and commercial customers in more than 40 countries, including remote weapon stations, high-energy lasers and high-power microwave systems, and they can cue interceptors toward incoming drones.
“Shield shares our view that autonomous systems can only act on what they can sense, and superior sensors lead to superior systems and outcomes.”— Eben Frankenberg, CEO of Echodyne
Shield will add Echodyne to its Mission Systems business as a sensing product line, alongside its Hivemind software, its V-BAT and X-BAT autonomous aircraft, and its Aechelon simulation technology. Echodyne will keep selling MESA radars as standalone products to integrators and end customers, and Echodyne CEO Eben Frankenberg will report directly to Shield CEO Gary Steele while keeping responsibility for products, manufacturing operations and customer and partner engagement.
“We are building a new-generation defense technology company consisting of three fast-growing, high-margin, mutually supporting business units: autonomy software, autonomous systems, and mission systems”— Gary Steele, CEO of Shield
Echodyne comes into the deal with recent wins. In September it received a contract with a $250 million ceiling from Joint Interagency Task Force 401 to supply counter-drone radar to U.S. and allied forces, an indefinite-delivery agreement supporting the Domestic Shield program with an ordering period of up to 36 months. It also opened an 86,350-square-foot manufacturing facility, a $40 million investment, that Shield says will be able to produce about 30,000 radars per year.
Steele pitched the market as reaching well past the battlefield. Echodyne's radars are already used to protect stadiums and airports and to let police and fire departments fly drones safely.
“Think about public safety, whether it's the Super Bowl or FIFA, just literally every single thing is going to need protection from drones”— Gary Steele, CEO of Shield
The acquisition also deepens Shield's footprint in Washington state, which the company named in September as the production home for X-BAT, its AI-piloted fighter jet that takes off vertically. Steele said X-BAT would fly for the first time before the end of the year.
Neither company disclosed absolute revenue, but both said they expect triple-digit revenue growth this fiscal year. Steele also addressed the midterm elections: "Even with the midterms, I think there will be a common view of what needs to be done on defense."
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