Greetings,

Defense tech company Anduril expects to burn through a massive $800 million to $900 million in cash this year in an aggressive bid to win giant Pentagon contracts. But what's truly unusual is how unperturbed investors—both big and small—are, lining up to back the fast-growing seller of drones, missiles, and border surveillance towers.

This appears to be the most coveted stock in the private markets right now. Small investors on the secondary market are willing to pay a far higher premium—nearly double what institutions most recently paid—for Anduril shares compared to other popular private companies such as SpaceX or OpenAI. The demand is white hot, a fascinating case study in corporate ambition and investor appetite.

Why it caught my eye:

• Extraordinary Valuation Premium: Secondary market investors are paying a premium that suggests a valuation for Anduril that is nearly double its most recent $30.5 billion valuation. One small investor was working on a deal that implies a valuation of more than $70 billion.
• Big Bets on Future Contracts: The heavy cash burn is funding a major weapons manufacturing facility and the development of an autonomous fighter jet. Backers encourage this investment to secure large, long-term "programs of record" from the Pentagon.
• Sky-High IPO Expectations: An early investor suggests Anduril could go public "within the next year" with a "$50 billion–plus" IPO. This market cap would make Anduril about two-thirds as valuable as major, entrenched defense contractors like Northrop Grumman.

The article by Cory Weinberg delves into the details of the company's aggressive strategy, the unusual dynamics in the secondary market, and how its executives have fueled the recent surge in demand. It's a must-read for anyone following the intersection of defense, tech, and private market valuations.

Best,

Jessica Lessin
Founder & Editor-in-Chief

Anduril Is a Hot Ticket Despite Burning More Than $800 Million in Cash

Defense tech company Anduril expects to burn through $800 million to $900 million in cash this year in an aggressive bid to win giant Pentagon contracts. Investors big and small are unperturbed, lining up to back the fast-growing seller of drones, missiles and border surveillance towers.

The company appears to be the most coveted stock in the private markets, with small investors on the secondary market willing to pay nearly double what institutions most recently paid. That's a far higher premium than small investors are paying for shares of other popular private companies such as SpaceX or OpenAI. Demand for Anduril shares has soared in recent weeks as executives did the rounds of popular podcasts and discussed the company's fast revenue growth.