Carlyle Group has joined JPMorgan Chase and Andreessen Horowitz in a funding round exceeding $1bn for defence technology company Castelion, according to Private Equity Wire. The California-based startup stated that the Series C financing values it at approximately $13bn. The round includes about $800m of equity and a $250m revolving credit facility.
Round Composition and Investors
The round comprises equity and debt components and includes additional venture capital investors. JPMorgan Chase established a $10bn investment vehicle as part of a national-security initiative. Andreessen Horowitz participated as an earlier investor in Castelion, according to Private Equity Wire.
Castelion’s Use of Proceeds
Castelion plans to accelerate production of its Blackbeard hypersonic missile. The company will also fund development of a larger hypersonic strike system and a missile designed for mass-produced air defence. Castelion has already invested roughly $250m in a manufacturing campus in New Mexico dedicated to producing Blackbeard and is seeking an additional site for future weapons systems. Management has begun work on a longer-range hypersonic platform to address US military requirements in the Pacific. The company has chosen to invest in development ahead of securing a formal Pentagon contract.
Carlyle Defence Expansion
For Carlyle the investment marks further expansion of its exposure to the defence sector. Ian Fujiyama, who leads the firm’s aerospace, defence and government practice, stated that the firm was attracted by Castelion’s ability to develop and manufacture weapons on shorter timelines than traditional contractors. Carlyle sees opportunity to invest in rebuilding defence manufacturing capacity in munitions and hypersonic weapons, according to Private Equity Wire.
