A defense technology startup funded by prominent Silicon Valley investors announced Wednesday the opening of a new manufacturing plant in Dallas, marking its official emergence from stealth mode. Covenant will utilize the 105,000-square-foot facility to produce lower-cost cruise missiles for the U.S. military.
The company has secured $250 million in funding spread across three rounds, supported by heavyweight investors including Andreessen Horowitz, Peter Thiel’s Founders Fund, 8VC, Lux Capital, Aleph, and Lightspeed. Founded in 2024, Covenant is positioning itself to challenge the dominance of traditional defense primes in the long-range missile sector.
The Dallas factory is scheduled to begin serial production of the Anthem long-range, heavy-payload missile in the first quarter of 2027. The initial target is to produce 1,000 units during the first year, with plans to eventually scale output to 5,000 annually. Covenant stated that the Anthem system is priced at a fraction of legacy alternatives like the Tomahawk missile, currently produced by RTX.
Abby Denburg, Covenant’s president and chief growth officer, told CNBC that the current political climate acknowledges the critical role new market entrants can play in the defense ecosystem. She highlighted a strategic gap in the current arsenal between high-tech systems and the low-cost, short-range drones that have gained prominence in conflicts such as the one in Ukraine.
“There is a gap in the middle of that for affordable mass and strategic range, and that’s the gap that Anthem was filling,” Denburg said. She emphasized the company’s goal of reducing costs without compromising payload capacity.
The push for increased domestic production comes amid reports that the U.S. weapons stockpile is rapidly depleting as the war in Iran enters its seventh month. In addition to the Dallas facility, Covenant currently operates production sites in Germany and northern Israel and employs over 200 people worldwide.
On the same day as the factory announcement, Covenant revealed two new Department of Defense agreements: one with the Army to accelerate test and qualification programs, and another with the Navy to adapt the Anthem missile for maritime operations.
The launch underscores the growing influence of tech-focused venture capitalists in shaping defense policy and procurement. Both Peter Thiel and Marc Andreessen have seen their political stature rise during the Trump administration. Thiel, who backed Donald Trump’s 2016 campaign and JD Vance’s Senate run, has close ties to the current White House. Andreessen was recently appointed to the Pentagon’s defense policy board, joining Blake Masters of Thiel Capital. Earlier this year, Andreessen Horowitz announced a multibillion-dollar fund dedicated exclusively to U.S. aerospace and defense.
Interesting timing with the Dallas plant opening. Filling that gap between cheap drones and expensive Tomahawks makes strategic sense.
Cheaper drones are one thing, but cruise missiles? I’m skeptical about how ‘low-cost’ these really are when payloads and range are involved.
Silicon Valley investors now running missile factories? This is a complete departure from traditional defense procurement models.