Thiel-Backed Startup Unveils Cheap Missile for China Fight

Thiel-Backed Startup Unveils Cheap Missile for China Fight

A jet-powered cruise missile in flight over a desert landscape.
Anthem, the long-range cruise missile developed by Covenant, a defense startup backed by Silicon Valley venture funds.Illustration: The Frank

The News

A defense startup bankrolled by Silicon Valley's biggest venture funds says it can build long-range cruise missiles by the thousand — and undercut the Pentagon's traditional suppliers doing it.

Covenant, a defense startup founded in 2024 and backed by Andreessen Horowitz, Founders Fund, Lux, 8VC, Aleph and Lightspeed, unveiled a ground-launched cruise missile called Anthem on Wednesday, pitching it as a heavy-payload weapon that can be mass-produced cheaply.

The company opened a 105,000-square-foot plant in Dallas the same day and says it is aiming for full-rate production of 5,000 missiles a year there.

"We were designed for the China fight," Covenant President Abby Denburg told Reuters.

The Numbers

Covenant has raised just over $250 million across three rounds and employs more than 200 people in the United States, Germany and Israel, according to Reuters and the Jerusalem Post. It has booked roughly $150 million in orders and is targeting a mid-six-figure price per missile at full-rate production.

Timeline

2024

Covenant is founded by Michael Kaufman, a former investor at Thiel Capital, and begins development in stealth.

Past 12 months

The company flies Anthem more than 200 times in tests, including multiple flight tests with the US Army in the United States and abroad, the Jerusalem Post reports.

Sept. 9, 2026

Covenant unveils Anthem publicly after two years of development and opens its Dallas production facility.

By end of 2026

An international customer is due to begin taking delivery of German-built Anthems, executives told Reuters.

2027

US Army deliveries are expected and the company expects to begin generating revenue as deliveries ramp; the Jerusalem Post reports the Dallas plant begins serial production in early 2027.

Reactions

Kaufman, Covenant's co-founder and CEO, told Reuters that comparable weapons from the biggest defense contractors are "being built in small quantities at really high prices. And so we set out to change that."

"When you look at our adversaries, you see thousands of hardened targets, beyond the range of current capabilities," Kaufman told the Jerusalem Post. "Anthem was built to credibly hold those targets at risk in a prolonged conflict. If our stockpiles run thin, so does our deterrence."

Kathleen Hicks, the former US deputy secretary of defense and now an adviser to Covenant, said the system lines up with the Pentagon's Replicator Initiative: "Covenant has built Anthem in direct alignment with Replicator's principles."

Mike Garcia, a former US representative and also a Covenant adviser, said the West doesn't "lack advanced weapons, we lack enough of them, and that's a production question as much as a technology one."

Denburg said the company will be judged on delivery, not the announcement: "Now the measure of our success is execution."

What's Next

Deliveries are the test. An overseas customer is set to receive German-built missiles by year's end, with US Army deliveries expected in 2027 and revenue starting the same year.

Covenant says more contract awards are expected later this year. It is also working with the US Navy's Rapid Capabilities Office on a maritime variant, a project the Jerusalem Post values at roughly $70 million with cost-share and export-acceleration components, and operates under an Other Transaction Agreement with the Army for accelerated testing and qualification.

Reuters notes the obvious risk: new defense companies often struggle to get traction against entrenched incumbents and can stumble on delivering in large quantities.

More

Anthem carries a payload of more than 200 kg (441 pounds) and is powered by a solid rocket motor for takeoff and a heavy-fuel jet engine for cruise flight, Reuters reports. In a fight it would be fired in high volumes alongside weapons like Raytheon's 1,000-mile Tomahawk and Lockheed Martin's 600-mile JASSM-ER.

Military planners envision ground-launched weapons fired from allied islands near China, such as the Philippines — a stretch of roughly 2,000 miles that would put Chinese targets in range without relying on manned aircraft or carrier strike groups, according to Reuters.

The pitch is built on supply chain, not exotic technology. Covenant says most of Anthem's components are commercial off-the-shelf, that it deliberately avoided sole-source suppliers by lining up three solid-rocket-motor providers with a fourth in the works, and that it has locked in long-term agreements for more than 4,000 jet engines over the next two years.

Beyond Dallas, Covenant runs a plant in Leipzig, in the German state of Saxony — Reuters reports it will also have a 5,000-unit annual capacity, while the Jerusalem Post reports the company aims to build 1,000 missiles a year there starting next year — and a smaller facility in northern Israel that Reuters says will make 2,000 units a year.

The timing is not an accident. The unveiling comes as the US and its allies scramble to restock precision-strike munitions after the war in Iran drew down inventories faster than the traditional primes can refill them.

Poll

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