Hypersonic weapons startup Castelion has secured $350 million in a Series B funding round led by Lightspeed Venture Partners and Altimeter Capital, according to sources and documents reviewed. The round, which values the company in the billions, is expected to close within weeks.
This significant investment follows closely on the startup’s previous $100 million Series A raise completed in January, also headed by Lightspeed, which included around $70 million in equity alongside $30 million debt financing. Castelion declined to comment publicly on the latest funding round.
Entering the traditionally challenging defense contracting market, Castelion has rapidly distinguished itself since emerging from stealth mode in late 2023. Founded by former SpaceX executives, the company seeks to revolutionize production and deployment of hypersonic missile systems—one of the most strategically crucial military technologies today.
Currently, the U.S. Department of Defense finds itself in fierce competition with China in the race to build formidable hypersonic capabilities, weapons systems designed to travel beyond Mach 5. Senior military officials have repeatedly warned that China’s advances in deploying operational hypersonic systems are beginning to outmatch U.S. efforts. Castelion’s leadership believes their company can respond effectively to this critical capability gap.
Modeling itself after SpaceX’s successful approach—rapid prototyping, frequent testing, and tight vertical integration aimed at significantly lowering costs—Castelion has already secured an array of Department of Defense grants and awards. Among the entities supporting the startup’s work are the Air Force Research Laboratory and Naval Air Systems Command. Earlier this year, Castelion conducted its first successful flight test of a hypersonic vehicle in the Mojave Desert, a significant proof point as it moves closer to demonstrating its technology for large-scale manufacturing.
The U.S. Army specifically named Castelion in its proposed fiscal year 2026 defense budget, requesting $25 million under the initiative known as Project HX3. This initiative is tailored for development and testing of affordable, mass-produced hypersonic weapons. The Army’s request includes plans for Castelion to create a lower-cost missile named Blackbeard Ground Launch (GL), which aims to offer about 80% of the performance of advanced long-range hypersonic programs currently pursued by major aerospace contractors, but at a substantially reduced price. Under these terms, the Army openly signals its willingness to trade slightly lower specs in speed and range in pursuit of significant budgetary savings.
Once formally approved via presidential signature, the funding will flow through two distinct project phases. Initially, Castelion will deliver a proof-of-concept product for demonstration tests in early 2026. If successful, phase two moves forward in 2027 with Castelion supplying ten prototype missiles scheduled for additional evaluation using the army’s existing High Mobility Artillery Rocket System (HIMARS). Blackbeard GL will also be engineered to be compatible with a new autonomous launcher currently under development.
Should Castelion’s field tests progress favorably, the company would stand at the threshold of significantly larger defense contracts, with potential deployment orders projected for early 2028. Such a move would markedly reshape a hypersonic-weapons market currently dominated by defense-industry giants Lockheed Martin, Raytheon, and Northrop Grumman—all of which may soon find themselves directly challenged by the startup’s ambitious trajectory.
