The Pentagon’s Office of Strategic Capital has offered Neros Technologies a loan of up to $450 million to build drones and the parts inside them. The Department of War announced the conditional commitment on 2 November.
Neros is adding $165 million of its own equity, the company said, for a $615 million project. The department’s release lists what the money is for: complete drones and ground control stations, plus motors, radios, flight electronics, sensors and batteries.
None of it is drawn yet. Before the loan closes, Neros must meet financial, legal, technical and due-diligence conditions, the department said. It gave no timetable.
Parts for other drone makers
The factory in Torrance, California, will make propulsion motors, flight stacks, radios and thermal sensors. Some will go to other drone makers. The department said Neros will supply NDAA-compliant components to “other U.S. and allied drone manufacturers”.
NDAA-compliant means free of parts from China and other barred countries, which the Pentagon requires in the drones it buys. In August, vendors in the Pentagon’s Drone Dominance programme were short of compliant motors, batteries and chips, Inside Unmanned Systems reported.
James Shanahan, a senior managing director at the office, said “winning the drone industrial-base competition” starts with a domestic supply of components. Its director, David Lorch, said the loan would “turbocharge” Neros’ production.
FlightBrief analysis: if the plan works, Neros becomes a supplier to the companies it competes with for Pentagon orders.
An $820 million offer came first
The office made a larger offer on 31 July: a conditional commitment of up to $820 million to Performance Drone Works, also for drone components. Both deals are commitments, not loans paid out.
Neros moved this year from a 15,000-square-foot workshop into a 250,000-square-foot building it calls Millennium One, the company wrote in February. Chief executive Soren Monroe-Anderson said the loan puts Neros “on the path to one million drones” a year by 2028.
Its orders are a fraction of that so far. This summer the Army gave Neros a contract worth up to $500 million for its Archer drone. In September, Neros said its Drone Dominance order was 14,000 drones, valued at over $100 million.
Neros raised $250 million in August at a $2.5 billion valuation. The loan, if it closes, would be almost twice that round.
