Defense startup Castelion has raised $1 billion in a Series C funding round at a $13 billion valuation, according to the company's announcement. The capital will fund production scaling of its Blackbeard hypersonic weapon system and development of new long-range and defensive capabilities.
Castelion's central challenge is manufacturing thousands of weapons at low cost, a problem borrowed from aerospace. Co-founder and CFO Andrew Kreitz, who previously worked at SpaceX, said the company is applying principles of vertical integration, rapid testing, and high-rate manufacturing design to weapons production. The startup is one of a handful of hypersonic weapon developers racing to move systems from test phases into production as the Pentagon prioritizes rapid-strike capabilities in peer competition with China and Russia.
The round values Castelion at nearly triple its Series B valuation in 2025. Investors include Carlyle Group, Lowercarbon Capital, Founders Fund, and others. Hypersonic missiles travel faster than Mach 5 and remain a technology gap for U.S. military readiness. Current programs like the Air Force's AGM-183 ARRW have faced production and cost challenges; Castelion's manufacturing focus addresses that vulnerability. The company's Blackbeard system is designed for production at scale, with unit economics as a core design parameter rather than an afterthought.
Castelion was founded in 2021 and has grown to over 400 employees. The company operates production facilities alongside development labs, integrating manufacturing constraints into weapons design from the outset. This factory-first approach has drawn interest from the Defense Innovation Unit and military acquisition officials seeking alternatives to traditional contractor timelines.
The $1 billion Series C follows sustained venture and growth investment in defense technology. Earlier this year, Anduril Industries raised $1.3 billion at an $8.5 billion valuation, and Axiom Space closed $325 million for space-based systems. Defense startups have collectively raised over $10 billion annually since 2023. Castelion's valuation gain of roughly 86 percent in one year follows investor confidence in hypersonic strike as a production-ready capability, now cost-optimized for scale.
Whether Castelion achieves unit-cost targets while maintaining performance specifications remains the open question for the Pentagon. The company has not disclosed pricing or delivery timelines for Blackbeard. If production rates exceed development timelines, Castelion could become a primary supplier of hypersonic strike systems to the Air Force and Navy within 24 months.
