On Anduril’s Series F (That Finally Closed)
A $1.5 Billion Raise, a $14 Billion Valuation and a 28x multiple
After months of significant effort, Anduril has finally announced their latest funding round. I wrote about this three months ago when the news first broke by The Information’s Cory Weinberg. The Series F funding round ended with a $1.5 billion raise, resulting in a $14 billion valuation.
Based on the company’s estimated revenue of $500 million (estimated from $350 million in publicly available revenue and accounting for approximately 30% of DoD awards not disclosed), this implies a 28x revenue multiple. For comparison, I assess similar metrics from other public defense, space, and hardware companies. The average EV/LTM (Enterprise Value/Last Twelve Months) sales multiple for these companies is around 2.4, with higher growth rates pushing the multiple up to 8.3x for Rocket Lab.
Data source: Tegus, Aug 8th 2024
This multiple is closer to Palantir’s, which has a $67 billion valuation and a 25x EV/LTM Sales multiple with a 27% growth rate, making it the most expensive public company in the cloud/data space.
Source: Clouded Judgement 8.2.24 - Uncertainty Everywhere by Jamin Ball
Anduril is clearly enjoying a very high premium, which will likely continue as they fund their ongoing expansion and aggressive acquisition strategy necessary to fuel their growth and meet expectations. Based on the total $1 billion in publicly available federal revenue of the company since its start, categorizing the nature of their existing government awards reveals that Anduril has primarily moved past the R&D stage (see graph below). This is unlike many newer defense startups, which are primarily focused on research and are nonetheless pursued by funds trying to enter this space, especially now that the software business is not doing as well. Anduril’s strategy is certainly a template for other funds and companies, if they can figure out how govcon actually work.
Source: Procure.FYI Anduril Data
One of my favorite books, “Engines That Move Markets” by Alasdair Nairn, chronicles every technology cycle from the railway to the internet, highlighting how each cycle moves from bubble to deployment, with each step requiring heavy investment to fund the next stage. In order to sustain funding, we will probably live in a loud promotional media environment for defense tech for a while as Anduril continues to build and scoop up smaller players. They have a long way to go if they aim to fill the shoes of Raytheon or Lockheed Martin, with $72 billion in revenue—that is 144 times more than Anduril’s current revenue, but who’s counting.
Source: ‘Engines That Move Markets’ by Alasdair Nairn.