Defense technology startup Shield AI has reinforced its financial standing with an additional $300 million in equity and debt, expanding its ongoing Series F funding round to a total of $500 million. TechCrunch has exclusively learned that the Series F extension comprises $200 million in equity secured in November, an additional $100 million in new equity, and $200 million in debt. The debt component is provided by Hercules Capital, and this latest funding round has propelled Shield AI’s valuation to $2.8 billion, marking a notable increase from its $2.7 billion valuation in November.

Series F Breakdown

The latest injection of funds into Shield AI represents a strategic move to bolster the company’s ambitious initiatives, particularly the development of its flagship product, Hivemind. The Series F round now totals $500 million, with $300 million in equity and $200 million in debt. The equity portion consists of $200 million closed in November and an additional $100 million raised at the Series F valuation. The inclusion of venture debt, provided by Hercules Capital, signifies the company’s confidence in its trajectory and the strategic utilization of capital to achieve its goals.

Hivemind: Revolutionizing Autonomous Systems

At the core of Shield AI’s technological advancements is its flagship product, Hivemind—an “AI pilot” designed to transform conventional aircraft into autonomous systems. Hivemind enables teams of aircraft to operate independently, eliminating the need for remote operators, traditional communication methods, or reliance on GPS. Ryan Tseng, CEO, and co-founder of Shield AI attributes this capability to recent breakthroughs in computing power and artificial intelligence.

According to Tseng, “AI pilots are becoming a strategic conventional deterrent in class with our aircraft carriers and guided missile submarines.” This paradigm shift is notable for being the first software-defined strategic deterrent, made possible by advancements in AI and computing power, marking a significant transformation in aerospace and defense.

Venture Debt and Strategic Capitalization

While venture debt often carries a stigma, Shield AI’s strategic use of debt financing demonstrates its pragmatic approach to capitalization, particularly in the late stages of growth. The $200 million in venture debt provided by Hercules Capital complements the equity raised, contributing to Shield AI’s financial resilience and strategic positioning.

Unlike the typical narrative of venture debt being a survival mechanism for struggling startups, Shield AI’s employment of venture debt aligns with the late-stage growth strategy. This approach positions venture debt as a sensible means to propel a company toward profitability or a strategic exit, especially when additional capital is required to navigate the final stages of growth.

Recent Launch: V-BAT Teams

Shield AI’s recent launch of V-BAT Teams, a software product that synergizes with Hivemind, signifies the company’s commitment to advancing autonomous capabilities. This software enables teams of V-BAT drones to execute missions autonomously and in coordinated fashion. The introduction of V-BAT Teams underscores Shield AI’s dedication to providing innovative solutions that go beyond individual products, contributing to the broader landscape of autonomous systems and defense technology.

Shield AI’s successful extension of its Series F funding round, culminating in $500 million, showcases the continued investor confidence in its vision and technological innovations. The strategic infusion of venture debt, alongside equity financing, positions the company for sustained growth and success. As Shield AI continues to push the boundaries of autonomous systems with Hivemind and V-BAT Teams, its latest funding achievements mark a pivotal moment in its journey, reinforcing its role as a leader in defense technology and artificial intelligence.

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