According to two sources familiar with the funding process, Castelion, a company developing hypersonic missiles that has been operating for nearly four years, is planning to initiate a new funding round targeting a post-money valuation of at least $120 billion.
This target valuation is at least four times the company's valuation from its previous funding round in December of last year. The successful public listing of SpaceX has significantly ignited investor enthusiasm for defense technology startups, leading to a substantial increase in market capital flowing towards such companies. All three co-founders of Castelion are former employees of SpaceX.
The lead investor for this round and the total fundraising amount have not yet been disclosed, and the final valuation remains subject to adjustment. One of the sources indicated the company plans to complete the funding round next month.
The initiation of these funding discussions follows Castelion securing multiple procurement contracts from the U.S. Department of Defense, marking a significant operational breakthrough. This past Tuesday, the U.S. Navy awarded the company an order worth approximately $23 million for 50 prototype "Blackbeard" hypersonic missiles. This weapon system can travel at speeds exceeding five times the speed of sound and represents the company's first production order since its founding. Castelion plans to deliver the weapons to the U.S. Navy next year.
The U.S. Department of Defense has recently stated an urgent need for weapon systems that can be produced rapidly and at scale. This is driven by the widespread use of drones in conflicts like Ukraine and the high consumption of advanced munitions stockpiles in the Iran conflict. The U.S. defense appropriations bill for fiscal year 2027 is currently under congressional review and proposes allocating nearly $500 million in dedicated funds for the U.S. Army and Navy to procure low-cost hypersonic strike weapon systems.
Earlier this year, Castelion also secured two other substantial contracts from the U.S. Navy for integrating the "Blackbeard" missile onto multiple naval fighter aircraft. One contract disclosed in April was valued at $105 million.
Headquartered in Torrance, California, the company began construction on a 1,000-acre hypersonic weapons production campus in New Mexico at the end of 2025.
Founding Team's SpaceX Background
The commercial successes of companies like Anduril and SpaceX have shown capital the potential for high returns from capital-intensive defense businesses, creating a favorable environment for Castelion to launch its new funding round. Data from market research firm PitchBook shows that global venture capital investment in defense tech startups approached $50 billion last year, up from around $27 billion the previous year.
SpaceX's record-breaking $86 billion IPO provided substantial returns for investors like Founders Fund and Valor Equity Partners. The market anticipates this will further fuel investment interest in the defense sector, particularly favoring startups with a SpaceX pedigree.
Castelion's CEO and co-founder, Brian Haggis, previously served as Senior Director of Government Sales at SpaceX. Co-founder and CFO Andrew Klett handled financial matters at SpaceX. Co-founder and COO Sean Pitt was formerly the Head of Commercial Sales for Europe at SpaceX.
Castelion is one of several startups focused on developing missile products for governments. This spring, Anduril Industries achieved a pre-money valuation of $56 billion, focusing on autonomous drones and munitions. Earlier this month, defense tech firm Mach Industries reached a $1.5 billion pre-money valuation; the company recently acquired rocket manufacturer Exquadrum, which develops its own hypersonic missiles.
Castelion completed a $350 million funding round in December last year, led by Lightspeed Venture Partners and Altimeter Capital, at which time the company was valued at $28 billion.
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