Shield AI to Buy Radar Maker Echodyne for $5.3B, Raising $2.5B at a Doubled Valuation

What happened

Shield AI announced on Nov 5 from San Diego and Kirkland that it has signed a definitive agreement to acquire Echodyne in a transaction valued at up to $5.3 billion: $4.8 billion payable or issuable at closing, plus up to $500 million contingent on Echodyne meeting agreed financial performance targets.

To fund the deal, Shield AI is raising $2.5 billion: a $1 billion Series H at a $28.8 billion post-money valuation, co-led by Disruptive and Innovation X Capital; a $1 billion structured equity investment from funds managed by Blackstone; and $500 million in debt financing led by JPMorgan Chase Bank as sole arranger. If the acquisition falls apart, the $2.5 billion financing does not go through.

Echodyne, based in Kirkland, Washington, makes compact solid-state radars built into hundreds of counter-drone and security systems used by defense, government and commercial customers in more than 40 countries. The acquisition is expected to close in early 2027, subject to regulatory approvals.

Key facts

1. Deal structure: Up to $5.3 billion in total; $4.8 billion payable at closing; up to $500 million tied to performance targets
2. Financing: $2.5 billion in total: a $1 billion Series H, $1 billion of Blackstone structured equity and $500 million of debt
3. Valuation: $28.8 billion post-money in the Series H, versus $12.7 billion in a financing in March — more than double in eight months
4. Echodyne background: Spun out of Intellectual Ventures in 2014 with a $15 million round led by Bill Gates and Madrona; about $200 million raised in total; PitchBook put its valuation at $485 million after its last priced round; in September it won a Pentagon counter-drone contract with a $250 million ceiling
5. Shield AI business: Hivemind autonomy software and the V-BAT drone; in September it disclosed plans to build the AI-piloted X-BAT fighter jet south of Seattle; both companies expect triple-digit revenue growth this fiscal year
6. People: Echodyne CEO Eben Frankenberg will report directly to Shield AI CEO Gary Steele and retain responsibility for products, manufacturing, customers and partnerships