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Hypersonic Weapons Startup Castelion Nears $350M Series B to Scale Low-Cost Missile Production
July 3, 2025
Castelion, a hypersonic weapons startup founded by former SpaceX executives, is in the final stages of raising a $350 million Series B round led by Lightspeed Venture Partners and Altimeter Capital, according to sources and documents reviewed by TechCrunch. This new round, expected to close in the coming weeks with a signed term sheet in place, values the company in the billions and follows a $100 million Series A raised in January — which included roughly $70 million in equity and $30 million in debt, also led by Lightspeed.
While Castelion declined to comment, the startup has been making significant progress in breaking into the traditionally difficult U.S. government defense market, particularly in the critical hypersonic missile sector. Hypersonic weapons, which travel at speeds above Mach 5, have become a major focus amid concerns about China’s rapid advancements that threaten to outpace U.S. capabilities despite the Department of Defense’s massive budget.
Taking inspiration from SpaceX’s rapid development and vertical integration model, Castelion aims to revolutionize hypersonic missile manufacturing by building quickly, testing often, and cutting costs — a shift from the slow, expensive legacy defense procurement approach. Since emerging from stealth in late 2023, Castelion has secured multiple grants and contracts from DoD offices including the Air Force Research Laboratory and Naval Air Systems Command.
In March, the company conducted its first hypersonic vehicle test in California’s Mojave Desert, an important milestone in demonstrating its ability to deliver affordable, scalable hypersonic systems. This testing success helped position Castelion in the U.S. Army’s recently released fiscal year 2026 budget, which requests $25 million for “Project HX3.” This initiative supports the development of Blackbeard Ground Launch (GL), a hypersonic weapon designed to be mass-produced at a lower cost, sacrificing a modest amount of speed and range compared to traditional long-range variants developed by major aerospace primes.
The Army’s budget outlines a two-phase contract with Castelion, set to begin once President Trump signs the budget into law. The first phase will focus on delivering a prototype proof-of-concept for demonstration in early 2026. If successful, phase two will involve producing 10 prototype missiles by 2027, tested using the existing High Mobility Artillery Rocket System launcher. Blackbeard GL is also being developed for compatibility with a new autonomous launcher system, highlighting the Army’s push towards modernized, flexible deployment methods.
While Castelion’s previous DoD contracts are relatively small compared to the overall hypersonic weapons market, the potential is vast. If the Army’s field testing proves successful, Castelion could secure a larger production contract to begin delivering missiles as early as 2028, positioning the startup as a key player in the future of U.S. hypersonic defense.
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