Neros Technologies, a Torrance, California-based manufacturer of tactical FPV drones, has raised $250 million in Series C funding at a $2.5 billion valuation. The round was co-led by Sequoia Capital and American Strategic Technology Fund. Neros designs, manufactures, and supplies low-cost, NDAA-compliant Archer FPV drones with secure domestic supply chains for U.S. military and allied forces. The capital will accelerate development of Archer AI autonomy features and the Bandit counter-UAS interceptor while scaling the Torrance factory.
Defense Startups Triple Valuations
The timing comes amid surging defense tech investment: Anduril Industries raised $5B Series H in May 2026 at a $61B valuation, while Shield AI secured $2B Series G in March 2026 at $12.7B. Neros's exclusive focus on mass-produced, attritable FPV strike drones addresses the DoD's urgent shift from expensive multi-role systems to cheap, scalable munitions proven in Ukraine.
FPV Drones Drive Modern Warfare
Ukraine used over 7 million FPV drones in 2025, with more than 70% of casualties attributed to drones. The U.S. produces only 1-3% of global small drone supply while China produces tens of millions annually. Current solutions fall short because traditional defense primes deliver at low volume and high cost, and existing FPV systems lack electronic warfare resistance and domestic manufacturing compliance.
Vertical Integration Meets Battlefield Needs
Neros vertically integrates flight computers, radios, and powertrains in-house, assembling drones in 45 minutes versus 12 labor hours for competitors. Its Archer family includes the fiber-optic Archer Fiber for jam resistance and the new Bandit interceptor reaching 233 mph. Unlike Anduril's broad platform or Skydio's reconnaissance focus, Neros specializes in kinetic FPV strike at scale with real combat validation from its Kyiv office.
"Building 1 million drones a year is a manufacturing problem before anything else." — Neros leadership on scaling the Torrance facility.
Sequoia Backs Manufacturing Ambition
Sequoia Capital's continued leadership, alongside American Strategic Technology Fund, signals conviction in domestic hardware production. The syndicate includes repeat investors Thiel Capital, Spark Capital, and Valor Equity Partners, plus angel Dylan Field. The round follows a $75M Series B just nine months earlier, funding expansion from a 20,000 sq ft El Segundo site to a 250,000 sq ft Torrance factory.
Military Drone Market Expands Rapidly
The military drone market stands at $22.49 billion in 2026 and is projected to reach $34.85 billion according to MarketsandMarkets estimates, growing at 11.1-25.7% CAGR through 2031-2034. Key competitors include Firestorm Labs, which raised $82M Series B in April 2026, and Skydio at $110M Series F in April 2026. Structural drivers include the NDAA mandate for China-free supply chains and the Pentagon's PBAS and Replicator programs for attritable systems.
What's Next
Neros plans to deploy Archer AI and Bandit in combat theaters by end of 2026, reach a 100,000-drone annual run rate by year-end, and hit 1 million drones per year by 2028. It is hiring senior manufacturing talent from SpaceX to support the Torrance ramp.