Silicon Valley-backed Covenant unveils low-cost, mass-producible cruise missile

WASHINGTON, Sept 9 (Reuters) - On Wednesday, defense startup Covenant unveiled a long-range cruise missile with a heavy payload that it claims can be rapidly produced in large numbers at a comparatively modest cost, presenting the latest challenge by some of Silicon Valley's most prominent investors to established U.S. weapons manufacturers.

Covenant's announcement comes after two years of development and aligns with efforts by the United States and its allies to replenish missile stockpiles with cheaper, more abundant long-range precision-strike weapons, following the war in Iran that drained inventories of these critical munitions.

The missile, named Anthem, is a ground-launched cruise missile capable of carrying a payload exceeding 200 kilograms (441 pounds). In combat scenarios, it is intended to be deployed in high volumes alongside other long-range systems such as the 1,000-mile (1,609-km) range Tomahawk cruise missile from RTX's Raytheon unit and Lockheed Martin's 600-mile Joint Air-to-Surface Standoff Missile-Extended Range (JASSM-ER).

Comparable systems offered by the largest defense contractors are "being built in small quantities at really high prices. And so we set out to change that," Michael Kaufman, co-founder and CEO of Covenant, told Reuters in an interview.

Founded in 2024, Covenant has secured just over $250 million in funding from investors including Andreessen Horowitz, Founders Fund, Lux, 8VC, Aleph, and Lightspeed. The company now employs more than 200 people across the United States, Germany, and Israel.

Anthem is powered by a solid rocket motor for launch and a heavy-fuel jet engine for cruise. According to Covenant, the missile has undergone more than 200 test flights over the past year.

Executives noted that the missile was designed with the Pacific region in mind. "We were designed for the China fight," said Covenant President Abby Denburg.

Military planners envision using ground-launched weapons to strike from allied islands near China, such as the Philippines. This stretch of roughly 2,000 miles would place Chinese targets within range without depending on manned aircraft or naval strike groups.

Covenant aims to price each missile in the mid-six-figure range once full-rate production is achieved. The company has already booked around $150 million in orders and anticipates beginning to generate revenue in 2027 as deliveries scale up.

An international customer is scheduled to start receiving German-built Anthem missiles by the end of this year, while U.S. Army deliveries are projected to commence in 2027, according to executives.

New defense companies often face difficulties gaining momentum as they challenge entrenched interests with novel technologies, and they can encounter considerable hurdles in delivering products, especially at large scale.

Covenant said it deliberately avoided depending on sole-source suppliers. It has lined up three providers of solid rocket motors, with a fourth in development, and secured long-term agreements for more than 4,000 jet engines over the next two years.

The company's Dallas plant, which spans 105,000 square feet (9,754 square meters), opens on Wednesday and is expected to achieve full-rate production of 5,000 missiles per year.

Covenant also operates a comparably sized facility in Saxony, Germany, which will likewise have an annual capacity of 5,000 units. A smaller site in northern Israel is set to produce 2,000 units per year.