Shield AI Agrees to Acquire Echodyne for $5.3 Billion

Shield AI, maker of autonomous military aircraft systems, agreed to acquire radar maker Echodyne for $5.3 billion and raise $2.5 billion in new financing, the company said on Thursday. The financing package includes a $1 billion Series H at a $28.8 billion post-money valuation; Disruptive and Innovation X Capital were the co-leads for that round. Blackstone funds are providing $1 billion in structured equity, and JPMorgan Chase Bank is leading $500 million in debt financing. The round also drew Apandion, Center15 Capital, Snowpoint Ventures, Advent, and JPMorganChase’s Strategic Investment Group for its Security and Resiliency Initiative.

The deal is valued at $5.3 billion. At closing, $4.8 billion will be paid and issued, and up to $500 million depends on Echodyne hitting performance targets. Shield said it expects the deal to close in early 2027, subject to regulatory approvals and other customary closing conditions. The $28.8 billion valuation is more than double the $12.7 billion valuation Shield reached in March, when it raised $2 billion, according to Bloomberg.

Echodyne, based in Kirkland, Washington, produces compact solid-state radars using its patented MESA technology, which stands for Metamaterials Electronically Scanned Array. Echodyne said its radars are used by defense, government and commercial customers across more than 40 countries in hundreds of counter-drone and security systems. Shield said the acquisition builds out its Mission Systems business by adding software-defined radars for counter-unmanned aircraft systems that detect, track and defeat drones.

Shield CEO Gary Steele said the company is organizing around three units: autonomy software, autonomous systems, and mission systems. “The acquisition of Echodyne dramatically accelerates our efforts to meet growing customer demand for multi-mission capabilities, provides increased access to a rapidly expanding counter-drone industry, and further diversifies our revenue streams,” Steele said. Echodyne CEO Eben Frankenberg said Shield shares his company’s view that “autonomous systems can only act on what they can sense”. Shield said the two companies anticipate revenue growth in the triple digits this fiscal year.

In September, Joint Interagency Task Force 401 gave Echodyne a counter-drone radar contract for U.S. and allied forces. The award has a $250 million ceiling, according to Shield. Inside Unmanned Systems reported that the contract allows ordering for up to 36 months. Shield said those radars are integrated onto remote weapon stations as well as high-energy lasers and high-power microwave systems, where they cue interceptors toward incoming drones. The company said civilian users deploy the same radars to guard stadiums and airports, and to help police and fire departments operate drones in shared airspace.

Echodyne has begun operating an 86,350-square-foot manufacturing plant in Kirkland, a $40 million investment with capacity of about 30,000 radars a year, according to Shield. Shield said in September that Washington would be the production home for its X-BAT autonomous system. When the deal closes, Echodyne’s staff will stay and MESA radars will still be sold as standalone products. Frankenberg will report directly to Steele and keep responsibility for Echodyne’s products, manufacturing, and partner and customer relationships.