Pentagon Offers Neros Up to $450M to Build Drones and Parts for Other Makers
Neros says the deal includes a taxpayer ownership stake, with terms unpublished, as the Pentagon's lender wants it supplying parts to other U.S. and allied drone makers.
Neros says the deal includes a taxpayer ownership stake, with terms unpublished, as the Pentagon's lender wants it supplying parts to other U.S. and allied drone makers.
The Department of War's Office of Strategic Capital (OSC) announced a conditional loan commitment of up to $450 million to Neros on Nov. 2. Neros said it is adding $165 million in equity, bringing the project at its Torrance, California, factory to $615 million.
The financing would support complete drones, ground control systems and components including motors, radios, flight electronics, sensors and batteries, OSC said. That capacity would serve Neros's own production and supply components compliant with the National Defense Authorization Act to other U.S. and allied drone makers.
Frequently Asked Questions
Has Neros received the $450 million?
No. OSC's commitment is conditional. Neros must meet financial, legal, technical, investment and due-diligence requirements before financial close, per the OSC release.
Is the government taking an ownership stake in Neros?
Neros's website says the deal gives the American taxpayer an ownership stake, and Defense Daily reports Neros called it small. OSC's release does not mention a stake, and none of the three announcements gives its form or percentage.
What would the money pay for?
Complete drones, ground control systems and components such as motors, radios, flight electronics, sensors and batteries, according to OSC. Neros says it is adding $165 million in equity for a $615 million project.
Why would other drone makers care?
OSC says the capacity would also supply components to other U.S. and allied drone makers. DroneXL argues that Neros competes with those makers for Pentagon orders, so any rival buying its parts has reason to know the terms of a government stake.
How far is Neros from its production target?
Neros targets 1 million drones a year by 2028. DroneXL put August output at about 1,200 a week, roughly 62,000 a year, and reports an interim company target of 10,000 a month by the end of 2026.
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Marcus Schuler
Marcus Schuler edits BattlePolicy, a daily defense-technology brief connecting the companies and capabilities behind modern war to the contest among Europe, the US, Russia, and China.