Silicon Valley is tackling the US missile shortage

A covenant is a binding promise and an anthem is a song about one, so a missile startup that takes the first for its name and the second for its product is at least sincere about its intentions. On September 9th Covenant, founded in 2024 and hitherto so secretive that its own missile was first identified from a Pentagon photo caption, opened a 105,000-square-foot factory in Dallas to build a ground-launched cruise missile called Anthem. It has raised more than $250 million from Andreessen Horowitz, Founders Fund, Lux, 8VC, Lightspeed and Aleph, roughly what the Navy spends on 70 Tomahawks, and reckons it can churn out 1,000 rounds in its first year and 5,000 a year in time, more missiles than America's entire Tomahawk inventory before the war with Iran.

The war is the reason anyone is listening. Since February 28th the United States has fired more than 1,000 Tomahawks at Iranian targets, a third of its stockpile and roughly eleven years of purchases at the rate the Navy has been buying them. At $3.6 million apiece, the missiles that hit Iran in the campaign's first month cost more than Covenant has raised in its life. Anthem, powered by a solid-rocket booster and a heavy-fuel jet engine and lugging a warhead of more than 200 kilograms, is meant to sell for a mid-six-figure price at full rate: six for one. "We were designed for the China fight," says Abby Denburg, Covenant's president, imagining volleys from the Philippines that hold Chinese targets at risk without a carrier in the water.

Look at the order books, however, and the shortage is a demand problem wearing a supply problem's clothes. Raytheon, which makes the Tomahawk for RTX, has for a decade held contracts that the Center for Strategic and International Studies, a think-tank, puts at a theoretical 2,330 missiles a year; it built about 60, because the Navy ordered about 60, and asked for 57 as recently as this spring. Covenant's factories, by contrast, are being built ahead of any such order. It has booked roughly $150 million in qualification, research and early-production work, less than it has raised, and expects revenue in 2027. Venture capital is doing what the primes declined to do for a decade: financing capacity on spec, and eating the risk that the demand evaporates with the ceasefire.