Neros Raises $250M Series C at $2.5B to Take Its Drone Line From Strike to Intercept

Defense capital has been pooling in one place lately: drones, and the machines built to stop them. Germany’s STARK raised €500 million in June at a €3.5 billion valuation; air-defense startup Singularity came out of stealth in July with $80 million; and on August 11, UK counter-drone firm Cambridge Aerospace closed $300 million at a $3.4 billion valuation. Four years of war in Ukraine have made the arithmetic hard to argue with — a few thousand dollars of small drone can erase a multimillion-dollar platform — and defense budgets are being rewritten around it.

In the US, Neros sits at the center of that shift. The Torrance, California company announced on August 11 a $250 million Series C at a $2.5 billion post-money valuation — triple its valuation at last November’s Series B.

Built by kids who raced drones

Neros builds FPV drones. The pilot flies through a headset fed by the drone’s own camera, as if sitting inside it — first-person view. These are not autonomous aircraft that find their own way; a human flies them by hand all the way into the target. The technique came out of drone racing, then rewrote the grammar of war in Ukraine once operators started strapping explosives to the airframes.

Both founders came from that racing scene. Co-founder and CEO Soren Monroe-Anderson got hooked on high-performance drones at eleven, raced professionally for five years, and started a company making racing drone parts while still in high school. Co-founder Olaf Hichwa designed custom circuit boards for racing drones. They met at a 2017 drone racing competition in Muncie, Indiana, and started Neros out of a garage in 2023 after Russia’s invasion of Ukraine, initially assembling drones from Chinese components and hand-delivering them to Kyiv in late 2023.

Those Chinese components were the problem. Cut the supply and American drone production stops with it. Neros’s answer was to own the core technology and vertically integrate the component stack. Its flagship Archer is a quadcopter FPV drone built with no Chinese parts, paired with the Crossbow ground control system. Tens of thousands have gone to the Ukrainian front, with a contract for 6,000 more through the International Drone Coalition.

The Pentagon followed. The US Army named Neros one of three first-tranche suppliers for its Purpose Built Attritable Systems (PBAS) program, which puts FPV drones in the hands of platoons, alongside Envision Technology and Strategic Logix. Neros delivered its first PBAS units ahead of schedule in March, launching Archer Block 2 — with arms, motors and props swappable between five-, eight- and ten-inch configurations — and Flatbow, a soldier-borne ground control station. On June 30 the Army awarded Archer a firm-fixed-price IDIQ worth up to $500 million. The company is currently turning out roughly 1,200 Archers a week and aims to reach 10,000 a month by the end of this year.

Adding autonomy to a hand-flown drone

The new capital goes to two products. Archer AI layers autonomy onto the existing platform. It is still hand-flown, but gains Terminal Guidance for the final few hundred meters — where jamming concentrates most heavily and most drones fail — and GPS-denied Position Hold for flying where satellite navigation simply isn’t available.

Bandit runs the other direction. It’s a counter-UAS interceptor built to take down Class 2 and Class 3 threats, including Shahed-style systems. When cheap one-way drones are hitting cities and infrastructure, answering each with a missile inverts the cost equation. Drones, the argument goes, are what you should use to kill drones.

Both are being built with the hardware and compute for multi-asset control — swarming — while holding the line on unit cost, because attritable mass stops working the moment the price per airframe climbs. Neros expects both in theaters of combat by the end of 2026.

“This newest round of funding accelerates Neros into a multi-capability drone manufacturer. Our mission to produce one million drones per year hasn’t changed, but the span of drones and mission sets we can support are multiplying,” said Monroe-Anderson. “Our core business has seen explosive growth since our last financing round in November, and this added capital gets our systems into war fighter hands faster, and at the scale needed for decisive outcomes on the battlefield.”

Sequoia’s third bet in a row

Sequoia Capital and the American Strategic Technology Fund (ASTF), an El Segundo-based fund focused on US strategic technology, co-led the round. Interlagos, Valor Equity Partners, Allen & Company, Thiel Capital and Spark Capital participated, along with Figma co-founder Dylan Field investing personally.

For Sequoia it’s three rounds running. Neros raised a $10.9 million seed led by Sequoia in May 2024, a $35 million Series A led by Vy Capital in March 2025, and a $75 million Series B led by Sequoia that November. Total funding stood at $121 million going into this round — which alone is more than double that.

The competition

Anduril‘s Bolt line is the most direct US rival: a loitering strike drone with over 40 minutes of endurance and 20km of range, evaluated under the Marine Corps’ Organic Precision Fires – Light program and awarded a contract for more than 600 units this January. But Anduril spans everything from reconnaissance to autonomous fighters, while Neros pours its resources into a single square — mass-produced small drones. Within PBAS, Envision Technology and Strategic Logix compete for the same volume, and Skydio holds ground on the Army’s reconnaissance side.

Europe is producing a different flavor of competitor. Germany’s STARK raised €500 million in June at a €3.5 billion valuation. Helsing has become Europe’s largest defense startup by pairing its HX-2 autonomous strike drone with AI software. France’s Harmattan AI attacks the exact ground Archer AI is moving into, bolting autonomous terminal guidance onto FPV drones.

The interceptor market Bandit is entering is more crowded still. Cambridge Aerospace, fresh off $300 million this month, goes at it with interceptors; Epirus takes down whole swarms at once with high-power microwave. Interceptor drones like Bandit offer the lowest cost per engagement, but carry their own unsolved problems around hit rate and reusability.