Anduril acquires Area-I for undisclosed sum

The company was founded by Oculus co-founder Palmer Luckey and staffed with former employees and executives of the big data surveillance company Palantir. Over the past several years, Anduril built a steady business providing border surveillance towers for the Department of Homeland Security. But the company is eying a much larger market for military hardware, where a handful of aerospace companies have long been dominant. It has invested in a D.C.-based engineering workforce meant to expand its military sales.

Chief Executive Brian Schimpf, a former Palantir engineering director, said he views Area-I’s drone technology as a way to extend the reach of manned military vehicles including ships, planes and helicopters in order to “push out sensing and awareness out beyond where it’s probably safe for humans.”

The company’s drones are currently in use by the Army, Air Force, Navy, NASA and the U.S. Special Operations Command. In an interview last week, founder and CEO Nick Alley declined to discuss how the company’s government customers tend to use the drones. But the company website suggests a range of possible uses, including surveillance and carrying an unspecified payload. They are designed to fly and carry out their missions autonomously.

Area-I was founded by a group of aerospace researchers out of the Georgia Institute of Technology. Alley taught a course in small aircraft design and started his own company with a team of researchers.

One of the company’s first government contracts was to design a system that could allow a C-130 gunship, widely used as a transport aircraft in dangerous battlefield conditions, to effectively see through clouds. That opportunity led the company to develop a series of tube-launched drones it calls ALTIUS.

Area-I has funded its operations primarily through government contracts and technology development programs meant for small businesses. But the merger with Anduril should give it access to substantial investment capital that will allow it to scale up more quickly.

Under the terms of the deal, Area-I is to operate as an independent subsidiary of Anduril. Alley said this arrangement would allow his company to continue to operate like a tech start-up as opposed to the research unit of a larger company.

“I was very reticent to follow the paths most of my predecessors, which was selling to a large aerospace prime … you can imagine how that would ruin our culture, ruin who we are,” he said. “All of those options were available … but we didn’t pursue them because of what it would do to us as a company.”

The small-drone market is a crowded one, with numerous companies designing military-specific surveillance drones. Shield AI, another California-based tech company has a drone piloting system it calls “Hivemind.”

The Oregon-based infrared surveillance company FLIR Systems markets a drone called the Black Hornet to police and military customers.Schmipf, the Anduril CEO, says his company is also trying to offer a lower-cost solution compared to the surveillance drones currently favored by the military. The larger Predator and Reaper drones the military often uses to gather intelligence and carry out targeted killings cost millions of dollars each.

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