By Mike Stone
WASHINGTON, Sept 9 (Reuters) - Defense startup Covenant on Wednesday unveiled a heavy-payload, long-range cruise missile it says can be quickly mass-produced at a relatively low cost, in the latest challenge to major U.S. weapons makers from some of Silicon Valley's biggest investors.
The announcement from Covenant after two years of development coincides with efforts by the U.S. and its allies to restock missile inventories with less expensive and plentiful long-range precision-strike
missiles after the war in Iran depleted stocks of the critical armaments.
Its missile, called Anthem, is a ground-launched cruise missile carrying a payload of more than 200 kg (441 pounds). In a fight, it would be used in high volumes to work alongside other long-range missiles like the 1,000-mile (1,609-km) range Tomahawk cruise missile produced by RTX's Raytheon unit and the 600-mile Lockheed Martin Joint Air-to-Surface Standoff Missile-Extended Range (JASSM-ER).
Comparable weapons from the biggest defense contractors are "being built in small quantities at really high prices. And so we set out to change that," Michael Kaufman, Covenant's co-founder and CEO, told Reuters in an interview.
The company, founded in 2024, has raised just over $250 million from investors including Andreessen Horowitz, Founders Fund, Lux, 8VC, Aleph and Lightspeed, and now employs more than 200 people across the U.S., Germany and Israel.
Anthem is powered by a solid rocket motor for takeoff and a heavy-fuel jet engine for cruise flight. Covenant says it has flown the missile more than 200 times over the past year in tests.
Executives said the missile was built with an eye toward the Pacific. "We were designed for the China fight," said Covenant President Abby Denburg.
Military planners envision using ground-launched weapons designed to strike from allied islands near China, such as the Philippines — a stretch of roughly 2,000 miles that would put Chinese targets within range without relying on manned aircraft or naval strike groups.
Covenant is targeting a mid-six-figure price per missile once at full-rate production. The company has already booked roughly $150 million in orders and expects to begin generating revenue in 2027 as deliveries ramp up.
An international customer is due to begin taking delivery of German-built Anthems by the end of this year, with U.S. Army deliveries expected in 2027, executives said.
New defense companies often struggle to gain traction as they take on vested interests with new technologies and can run into significant hurdles delivering their products, especially in big quantities.
Covenant said it deliberately avoided sole-source suppliers, lining up three solid-rocket-motor providers with a fourth in the works, and locking in long-term agreements for more than 4,000 jet engines over the next two years.
The company's Dallas plant, spanning 105,000 square feet (9,754 square meters), opens on Wednesday and is expected to reach full-rate production of 5,000 missiles a year.
Covenant operates a similar-sized facility in Saxony, Germany, which will also have a 5,000-unit-per-year capacity. A smaller site in northern Israel will make 2,000 units a year.
(Reporting by Mike Stone in Washington; Editing by Jamie Freed)
