FULL TRANSCRIPT
Welcome to the latest in our pre-IPO briefing series. My name is Slava Rubin. I'm one of the founders here at Vincent. We are the Alternative Investments platform with our Smart Humans podcast, our Alternative Investment Report newsletter, and lots of other good content. And of course, we have our pre-IPO briefing series, and Anduril is the next company in that. As always, we'd like to have Jan-Erik from Sacra So Jan-Erik, do want to say hi?
Hi, Slava great thanks. Excited to be here. Yeah. Co-founder of Sacra and we do private markets research. I'm really feeling this today. I got my F16 or I got a, got a t-shirt really in the mood here. So I don't think Finland is a, is a, Anduril customer yet, but maybe one day. So I love it. I love it. I guess I have the wrong t-shirt on, but, uh, I sent you.
Is the defense tech company some of you have probably not even heard of it. Some of you have heard about it for a long time and are eager to become investors. Some of you might have just heard about it last night for the first time on 60 minutes where they actually just talked about it have the founder on on the camera. So let's first start out with a word from our compliance department. So.
Nothing in this presentation should be construed as an offer to sell securities or a solicitation of an offer to buy securities. All investments involve risk and the possibility of loss, including loss of principle, and neither past performance nor forward-looking information is a guarantee of future results. So with that said, we're going to dive in here with the on-air kicking off, but it's just interesting, you know, a few years ago, we probably would never have thought that we were going to be talking defense tech as part of our pre-IPO series.
So I think it's just remarkable as to what's been happening and it's happening across the entire world. It's obviously happening because of the geopolitical issues, i.e. in the Middle East or the Ukraine and other places. And we're seeing advancements in technology across so many industries and an industry that we probably thought would never be touched with this type of innovation and with this type of startup energy was defense. And here we are talking a pre-IPO company in defense tech. So that is Anduril and Jan-Erik, take it away.
Awesome. Yeah, that is a great point. Do we have the, let me just get through the slides up here. Awesome. Yeah, you make a great point that, you know, a few years ago, this would have been, you know, hard to imagine. And that was pretty much the case for a lot of the early history of Anduril. So to zoom out, Palmer Luckey, who you see there, founder, left Oculus after selling it to Facebook, now Meta, and he teamed up with a few ex-Palantir folks.
and set up shop and they started building in the spirit of wanting to build defense products. So the first thing they built was a surveillance tower, right? Which a lot of people heard about back in 2017, 2018 and companies like Anduril were like very sort of out of the mainstream of what was cool in Silicon Valley to build. But that surveillance tower sort of led to a bunch of other products that they've built since then.
know, counter drone interceptors, their own drones, you know, underwater submarines that are autonomous. And then like you said with Ukraine, really that was from our perspective, the big pivot point where suddenly Defense Tech became cool. now, know, and there was on 60 minutes, you know, people are excited about this company. So yeah, to talk about the sort of product, like what are they actually building?
It's really a kind of a SpaceX-like story where you disrupt an existing space by sort of disrupting the procurement and the design part of it. So on the procurement side, everything that Anduril builds is built with as many sort of commercial off-the-shelf parts as they possibly can to keep the building materials low. The first border defense towers were built using lasers from a beauty shop.
that was in Orange County. And they sort of have kept that going. So there's a lot of that kind of commercial off the shelf parts and then a lot of vertical integration in the entire construction of the hardware and software. So this is another important thing is that, know, Anduril is less like a straightforward drone company or border tower company and more of a integrated kind of hardware and software stack where, you know, they have this sort of operating system
called Lattice that underlies all the sort of hardware products they put out and allows them to have sort of a unified array of sensors and data going into them that can go from a border tower to a counter drone interceptor and allows Anduril to have sort of a wider sort of stack on which they can offer to customers.
But yeah, we'll talk more about the product and sort of what they've put out recently. But on a fundraising point of view, it's been, you know, a massive company for founders funds specifically. And the company has raised over $6 billion. They just raised a $2.5 billion Series G that valued them at 30 billion. And right now, I believe on the secondary market, it's up to
in the 45 billion range, sort of implied valuation is trading at about $60 a share right now. So that's the quick version and yeah, excited to hop in.
So $60 a share, $45 billion. And for a lot of us, we probably are hearing about it for the first time or just recently that we've been hearing about it. So I guess I would start with how did this even happen? Where did this come from? we have the founder, Decrate Oculus, like you mentioned, sold that, I think, was it to Facebook for like $2 billion or something? Yeah, something like that.
And then was trying to figure out how can we change defense tech. So, you he started out with a 41, I think it was $41 million valuation. Now it's at a 45 billion. You know, obviously there's significant growth. I think they started out with the Century Towers, trying to defend the border. How do you go? How did you go from, you know, the border defense to now this massive company that was on 60 Minutes? Like, how did that evolve?
Yeah, so really the key, you know, sort of technological advantage that they had with the sentry towers was the kind of sensors that were in the tower. So being able to build a tower with, you know, really good visibility and the ability to track sort of, you know, human shapes, moving in distance, distinguish them from bushes or trees and do so very cheaply.
for the US government, that was sort of a key thing. The other big part of it is their business model is very much unlike a traditional prime like Lockheed Martin or Boeing, where the way it's always been done in defense is cost plus. So a contractor will come to the DOD and say, we can build this, here's a prototype or whatever, here's our idea. And then they'll get a contract for,
basically 10 years, however much money it costs, we're gonna give you that plus some five, 10 % sort of marginal profit, right? And then Anduril came in and said, well, we're gonna raise a bunch of money. Palmer is obviously very wealthy from his time at Oculus. So they decided to self-fund R &D upfront and then sort of bring these products to the government that were already built and sell them.
So they made this procurement process sort of flipped it on its head to where they spend the money on R &D themselves and then ship these turnkey systems. And, you know, I mentioned sensors, so that's where they started. But then there's sort of work on sensors and software and cheap vertically integrated hardware to sort of lead piecemeal from sensors to putting those sensors into something that could detect a drone.
to putting it into a drone itself. But it was really the sort of getting momentum through smaller deals like these sentry towers and sort of gradually building up different product lines depending on sort of what the DOD and these other federal agencies indicated they needed. So we started out with the towers and now they have a bunch of products. So what are those products? You know, there's both the, just so again, for the people's benefit, there's
the actual hardware products, meaning the actual things, and there's the connectivity, which is their lattice AI, which is kind of like their operating system. So can you just walk through kind of what the products are as examples to give people perspective? We really should just play some of the 60 minutes piece here, but it be great just to get the perspective. I'll do my best 60 minutes impression. So yeah, like I mentioned, it started with Century Towers, sort of this
You know, it's like instead of building a physical border wall, which is possible, but very expensive, time consuming, they sort of built a virtual wall where you have towers that can automatically flag people and agents. They went from there and they built these couple models of drone interceptors that are Anvil and Roadrunner, which are basically that turned up to the sky. So if you see a drone
you coming in, can, you can, you can spot it. You also have these kinds of drones that they started building that are backpack drones. So you can have a unit on the ground with, you know, someone has a backpack with a, with a ghost drone in it, which can take off autonomously patrol for, you know, say 90 minutes and sort of take video, take images of the surrounding landscape, stream,
that footage, you know, which is analyzed by lattice back to the unit and then the drone can fly back. They're also working on sort of autonomous, you know, fighter jets to sort of, you know, knock off one of the biggest, you know, the traditional primes, one of their biggest products is jets. So they're kind of going after that. One of their other big projects has been working with the Australian military
on these autonomous underwater submarines. And so those are some of the big ones. Recently, the biggest contract they got recently was for a billion dollars with the Marines to do anti-drone, putting an Anduril system at a military base in some kind of hostile territory, which can detect drones and destroy them as they're coming in. So that's becoming.
You know, think Anduril has this reputation of being like a drone company. That's very like patchy way to think about it. But, you know, the, now the majority of their contracts are for sort of anti drone, interception, which is just an indication of how sort of combat has changed since the early days of Anduril. And now we're seeing drones, playing a huge role, hugely asymmetrical sort of warfare going on where Anduril has kind of pivoted more into the anti drone.
space, although they're still working on drones as well. Absolutely. So as people have questions, as we're going through all this content, feel free to go into the Q &A and ask your questions. I'll be reviewing there to try to incorporate it as appropriate. So yeah, it's gone from these defense towers to drones to anti drone to submarines to anti drone systems, not just drones that destroy other drones.
but entire system to maybe change the electricity waves and just have the drones fall out of the air. Or now they've been talking about Fury, which is their actual fighter jet with no human inside of it, totally AI driven. The part that people should understand is this stuff is not remote controlled, right? This stuff is actually being done and these robots, let's call it, are being controlled by themselves and are intelligent, which is really the fascinating part.
And all of this is then connected with their operating system software layer, which is Lattice. I mean, we're a little bit talking about science fiction here, right? Compared to where we were at in war, even I would say a decade ago, or definitely 30 years ago, nothing looked like this. I mean, if you think about like the Iraq war, I remember, know, CNN, it's like, we're talking military tanks coming in and cruise missiles and like all of that. I mean, this is now completely being operated on its own.
You mentioned a word a few times, which is prime, right? There are five primes that already exist. And, you know, these guys are trying to be different and compete with these five primes, both on their business model and also their innovation. What does it mean to be a prime? And first, you know, the five primes are Lockheed Martin, Northrop Grutman, also Boeing, Raytheon, and Boeing. So there's five of these.
And what does it mean to be the five and how is it that all of a sudden, Anduril might be a sixth? Yeah, exactly. It's a great question. So a prime contractor in the context of working with the government is basically one of these contractors who has a direct relationship with the government. They, you know, completely manage their own projects, oversee, execute everything, manage their own, manage their own subcontractors, which is a huge
part of being a typical prime today. And then, you know, making sure the project is coming into compliance with the sort of terms of the project. So like you mentioned, yeah, there's a few, you know, very large major ones, which all pretty much emerged in that post, you know, during World War II, post World War II, Lockheed Martin, Boeing, Northrop, Raytheon, General Dynamics. And they do work on a lot of the same stuff.
that Anduril does, they compete for a lot of the same contracts, but like you mentioned, sort of business model wise, they can't so much compete because their business is designed around this cost plus contract. So it's worked well for them in terms of winning most of the big headline military projects of the last.
30 years, 40 years, but Anduril is really trying to build a prime of a new kind where Anduril can handle anything, any kind of project that the US military might wanna build. And they might use potentially in the future, use more subcontractors to do them. We see a lot of US defense startups coming up that could be
you know, powerful kind of point solution provider for Anduril. But they're trying to win, you know, on the basis of having the best technology, having the best ability to kind of move, move fast for the government. And then the business model, you know, in terms of not inflating the Pentagon budget too much with like the next big super project. I think, especially with the election of Trump, the
Pentagon budget, think that's going to be kind of a key, you know, will be a key tailwind for them in the coming years. I mean, it's really interesting the slide we're on right now, which you have two of the primes Boeing, Lockheed Martin that makes some jets, right? They're in huge revenues, 65, $70 billion and really low multiple on their revenue to market cap. But then on the left side there, you have this quote unquote tiny revenue for Anduril, but this massive multiple. Let's go to the revenue slide and talk about the Anduril revenue growth.
And how is it that Anduril was able to win over these other primes and get the Fury fighter jet, autonomous fighter jet contract? Like, how does that happen? And how, like this revenue growth is pretty remarkable.
Definitely, definitely. Well, I think a lot of it is the sort of the, know, when you are selling into DoD, doing these kinds of contracts, there's definitely a sort of stepwise increase in sort of contract size that you can get to if you're successful. And so, you know, a lot of the border stuff was very successful and led to these larger and larger contracts. And that's really what you're seeing in the revenue graph is, you know, the,
the growth of contracts from getting a little $40 million contract for some century towers as prototypes to then getting a billion dollar contract from the Marine Corps over 10 years to do anti-drone. So really it's a testament to kind of the technology, but also like the procurement.
the sort of government team that they have at Anduril to sort of be able to scale up these contracts and also go international. So, you know, that's a component that's growing in the last few years where they're working with, they've been working with Australia, been working with Japan, they're going into the UK big time right now. So sort of expanding both within the government, how much are they doing and also expanding geographically. So do you have a sense for where
You mentioned a little bit here, but where these revenues are coming from, is it from their goggles? Is it from their towers? Is from the drones, the anti drones, the submarines, the fighter jets, the software for lattice? And there was a mention on 60 minutes yesterday, which given the fact that we're going to have this talk, you know, they kind of just inserted very quickly, but you $6 billion of revenue from governments by the end of this year. I mean, that's if you look at that revenue chart, I mean, that means they have to hit like 4 billion, if not more.
this year alone. So what are your thoughts on that? Yeah, looking at the, you know, fortunately, some of this is in public records because it's it's US government spending. So we can sort of get at least a, you know, at least some sense. And this graph of distribution by contracts is from is from, I believe the last year's data was the last available. So
It kind of gives you a sense, know, a quarter of it is still customs and border control, which was really their bread and butter to start with. So that's the sentry towers for the most part. The rest of it has sort of been split between some of these other products we mentioned, drones, drone interceptor. And then, but really their biggest contract so far now is for anti-drone capabilities.
And the contract that they have with the Marine Corps specifically is their biggest yet. So yeah, $642 million contract with the Marine Corps to do AI, anti-drone. And then, yes, there is this sort of, the next biggest thing that they've done recently is Microsoft had a $22 billion contract to do these mixed reality goggles for the army. And again,
Anti-drone is not the only use case of the goggles, but that is one of the use cases. And Anduril is going to be taking that contract over. So that's 22 billion over many years and that's sort of a cap, but that's also very, obviously very large contract. Yeah, that's massive. As a matter of fact, we had a question, which is Anduril's IVAS system, the integrated visual augmentation system, which is the headset that you're referring to. I mean, getting that contract is massive. Is there anything else you want to cut?
regarding the headset.
Yeah, no, but that's exactly correct. Microsoft won the contract, it was a 10 year contract in 2021, but they sort of, I think three years in, they pretty much had discontinued working on it and for Anduril to get it, I think it's a testament to them being very sort of future looking with technology, very good at technology.
compared to some of the other Primes who, you still are big competitors on some of the traditional projects, but, you know, it's like, Anduril was such a good fit to sort of take over this program. mean, you know, needless to say, like Palmer Luckey invented much of like the modern sort of VR experience. So to work on AR goggles, it definitely makes a lot of sense. So I think we've covered quite a bit about what is Anduril what are they doing? Let's move on to kind of where this all headed.
Let me ask you two sides of the same question, which is there's these five incumbents, the primes, you know, these huge, well-established companies that have massive relationships with the government and have an unfair connection there. Why can they just not take advantage of kind of copy paste, seeing what Anduril is doing, do it similarly and just take out Anduril, if not by one of the competitors work together to just like, not as an oligopoly, but really.
figure how to get out this new up and comer. And on the flip side, why not just allow for them to, they're not stoppable. Maybe this is gonna be a trillion dollar company or a five trillion dollar company or whatever it is the defense budget in the United States or across many nations, it becomes the entire defense budget for the world.
So can you just take those two sides? Like why can't the five prime just kind of copy paste or kind of take them out? Or the reverse, if they're not able to copy paste, take them out, et cetera, what's not to have the opposite happen, which is Anduril takes over this entire market and these five primes go by the wayside.
Nice. Yeah. I'll on the second point, you know, why Anduril won't take over completely. think there's a, there's, you know, kind of a business model reason why, but also like a cultural reason why the government in the United States won't, probably won't want a single supplier of any, you know, most key systems that they have. So.
Like right now, you you have the, you had the Air Force contract to do the next generation kind of autonomous fighter jet and other contracts like that. You know, the government has said that they're not looking to pick a single winner, right? So they're going to encourage competition and they're going to encourage other companies to be involved in projects. So I think there's a sort of structurally,
And maybe that's kind of the most convincing angle for me is that, you know, the government doesn't want to be reliant on one company. There's a lot of concern around defense contractors and kind of, you know, monopolies or price gouging or the appearance of it. So I think that's one aspect. Another one is that all of these big primes are trying, are definitely trying to do similar things to what Anduril is doing.
One of the sort of, you know, most, one of the ones that comes up the most is general dynamics and like general atomics drones, you know, are up there. So they have like the Reaper drone, which has been, you know, in use since the early war on terror. And, you know, Lockheed Martin, Boeing, Northrop are still dominating, you know, the sort of biggest programs and
I do think in terms of producing the next generation fighter jets, they're still gonna be sort of in the mix. And so I don't see that really stopping for those various reasons. One thing I do think what we will see more of going forward is kind of a teaming up on contracts. So from the Anduril side, we've already seen, actually heard word that in 2025,
you know, Anduril is going to be teaming up more with Palantir, believe, Scale AI, Open AI, and there might've been another I was missing, but there's sort of this stack emerging in sort of, you know, upstart defense companies or adjacent, where what's expected is that they're going to start teaming up on bids to win over the traditional primes in the future as a way of sort of
taking on more of the defense budget and winning against Lockheed Boeing, Raytheon have insane amounts of resources. So sort of teaming up on that, having a sort of technologically forward, a consortium is what they're calling it about defense companies. How about the opposite? Why not the current prime figure out how to take out Androl? Is that not a copy paste? Just do what they're doing and
just we're bigger and we'll do it faster sort of thing? Or is that not possible?
Yeah, I I think it could be possible, but I do think these companies are sort of, I think there's a lot of sort of innovators dilemma, I guess, going on where they've sort of, they've built their entire business around these giant projects, huge allocations of capital, huge teams of employees, but also big relationships with these subcontractors.
where at least so far, and I think this is what people said about Anduril early on, so far they haven't shown the ability to replicate what Anduril does. I mean, in one example, Anduril has like 300 of these towers on the southern border covering like 30 % of it. And no one else has come in and done this better or cheaper. There's a legacy contractor
in that space, Elbit, you know, they're not, they're not taking the Anduril on no one else is. So I think, you know, for me, looking at it, I think that, that the most convincing evidence has just been that no one else has sort of copied it so far. Do you think one of the primes, this is just looking for prediction here, do you think they buy one of the primes or one of the primes M&As with Anduril or do you think that's just so old school for Anduril that it would weigh them down and they don't need it for prime access sort of thing?
Yeah, I think maybe a few years ago, if things hadn't picked up in the sort of drone space, I think that might've made more sense. think at this point, I think at this point it's not going to happen. I think Anduril is big enough and very ambitious and sort of not really capital constrained. And so I think that they are sort of, their mission is to be, as you alluded to and mentioned earlier,
to be that sixth prime. That's what they're really trying to build. Thinking broadly, what are the upside opportunities and what are some of the risks going forward?
Yeah, I definitely think, especially after the election, the upside has kind of become more clear, I guess. mean, Anduril had a great business under Joe Biden as well. But I think with Trump, there was really this reorganization of how we are supposed to think about defense spending. One of the co-founders of Anduril,
know, Trey Stevens was sort of invited into the administration. I haven't checked on this recently, but I believe he was supposed to be, you know, being considered for like a deputy director of defense type slot. And there's been several other folks in the sort of ex-Palantir universe who are being considered for administrative posts. So you have sort of this tight, you know, relationship between Anduril and the administration. You also have just the sort of
dual promise of we're going to be extremely technologically forward and we're going to have great defense, we're also going to cut the budget. And when they put that plan out there, they basically excluded from the budget cuts everything that Anduril does, included everything that traditional primes are really good at. And so it indicated this total sort of refocus of government spending on defense towards Anduril's priorities and
And now, in sort of the manifestation of that, we have Trump declaring we're gonna build a nationwide kind of version of Israel's Iron Dome, which is like sort of the Anduril science fiction project that they would have dreamed of having articulated. Whether or not that's feasible in the short term is another question, but I think the upside is basically that Anduril
becomes effectively a sixth prime in the US, sort of the technological leading edge of that space, but not just the US also, all of our kind of global allies, which is a term that's of shaky sometimes, but we are seeing Anduril selling into the UK. So even as sort of connections with other countries might fray in a political way, they're still making it work.
by sort of going into those countries and building Anduril of the UK, Anduril of Australia, and sort of supply chain and manufacturing in those countries, we're seeing them kind of export that American dynamism into other countries, even if it might seem like we're sort of moving towards America first mindset. So I think the upside has definitely...
has expanded a lot since the election, especially in the US, but also around the world. So you mentioned Japan buying, some Australia buying, some UK. Typically, defense is a scary thing to buy from the wrong country, right? Because you want to make sure you're getting the right products. So especially now that you're layering in AI and software and data, is this the sort of thing that could go global? Or do you think this is really a US company? Or do you think...
somehow they could go beyond that or they're gonna be 11 and rules equivalents in the world because each major superpower, China, Russia, India, whatever, Europe has to have their own version of and rules or and rule can get that revenue and market share. How do you think about that? Yeah, it's a really interesting question. I would have done some work recently on some of the European competitors. So a few of them are in Germany, Rheinmetall
There's a Helsing also in Germany. Helsing is private and more kind Anduril-esque and they're focused on AI and autonomy. Rheinmetall is more, it's a public company, more traditional German prime. You have other companies in the space like Destinus. know, the sort of US defense tech craze has definitely spread to Europe. And Europe is, think, where the biggest sort of international growth opportunity for Anduril will be.
probably can take Russia, China, India off the table and focus on Europe because I think that's where it'll be easiest for Anduril to sell into. It's also where there's the most demand because as the US has pulled back from engagement in Ukraine, there's been a corresponding seesaw uplift in European demand for defense spend. And right now, the budget predictions for a few years out
are like an extra 600, 700 billion euros being spent on defense in Europe. And that's all well and good, but Europe doesn't have it, Anduril yet. So in the short term, Anduril is pretty much the best source of this kind of, especially drone and anti-drone tech that they can get, which is why the UK is doing a deal with Anduril. Anduril is building a UK subsidiary to supply.
to supply drones to England, which will be sent to Ukraine. And it's a bit of a trick, you know, cause they can sort of with the Anduril UK, the UK can say, Hey, we're buying locally. We're not sending money to America. We're keeping in our economy, you know, our workers, our manufacturers. And that is sort of, you know, a nice way for Anduril to be able to sell internationally. But, you know, I think the flip side is if there were compelling European
know, options who were equally sort of inexpensive and technologically forward, that could be a risk. And, you know, there is a chance to, I mean, there are these concerns about kill switches being in US made hardware software. So I think there are some sort of sticky potential issues to figure out there, but I think Europe is definitely sort of big opportunity because Anduril is just so far ahead of sort of the European competitors.
And how much are they looking to vertically integrate? to create, whether it's their own motors, their own parts, their own materials, and how much of that is all being done in-house versus getting the right supply chain? Or what I've been hearing is they're almost becoming like the Facebooks and Google's of the world, where any great tech, they're just trying to keep an eye on it, and then they just try to purchase it and bring it in-house.
how do you think about Anduril in terms of trying to do it all themselves or partnering or vertically integrating, et cetera? Yeah, it's definitely a combination of all these things. like they've acquired quite a few companies in this sort of autonomous systems and sensor space. One of the big ones, so like we mentioned, they're underwater submarines, which are on 60 minutes.
they acquired a company called Dive Technologies and basically added their autonomous underwater vehicle to their portfolio, which lends to the vertical integration because they can add now the submarine and then they can hook it up into lattice to sort of bring it into the full stack. And they've done a lot of these acquisitions. They acquired one company that built solid rocket motors and now
Anduril has its own kind of like rocket motor production arm, which is producing motors for their internal use, but they're also selling them to other defense startups and other, yeah, kind of space adjacent startups as well to drive additional revenue. So there's definitely a combination of sort of further vertical integration acquisition to bring new
products into their portfolio and sort of bolster their prime credentials. So I think we'll continue to see that. And like I mentioned, there's a lot of these kind of upstarts solving point solution problems and defense that I think we can expect Anduril to continue to acquire to add to their portfolio. So give me some predictions. What could this look like in terms of projections and scenarios?
Yeah, let me just get over here. All right. So yeah, think, you know, right now they are selling into the DOD Pentagon. They're also selling into European allies via these sort of, you know, localized, you know, supply chains. I think if they basically were to continue on the trajectory they're at, you know, we would see something like
by 2029, let's say like 8 billion revenue at that point sort of 30 % year over year, it's kind of a bit of a decel but more kind of a realistic growth curve, what you expect from a company like this. Whereas last year they grew 138 % year over year. So I would say, that's sort of like a standard, if you were being conservative,
I think base case for Anduril. I think that the last year or so and sort of the tailwinds being now so strong, both from the sort of US Trump administration and the European and the global sort of move towards conflict, I think lends itself a little bit more towards the bear case where this, you know,
they are going to become an increasingly large part of how warfare is conducted in the military, just because warfare itself is changing. So drones and counter drones will become kind of like standard issue across all branches of the military. And you're also gonna have these other projects that are coming up, you're gonna have the jets, the goggles. I think this 14 billion in revenue
2029 is not out of the question in that case. And 14 billion, you're showing that as like a $225 billion enterprise value based on multiple. Is that right? Yeah. I mean, this is where it starts getting tricky, right? Because today, last we know they did about a million dollars, sorry, a billion dollars of revenue in 24. We don't know exactly how much revenue they've done in 25, but now they're saying... Yeah.
minutes that they've sold six billion dollars of contracts by the end of the year. Who knows what year that's supposed to be realized in so you can't give that all to five. So let's just say your two billion dollar number is right here. So it's two billion dollars today for this year and they're trading right now. They last were priced at 30 billion and but they're trading at 45 billion. So we're talking about like a 23x pretty much on today's revenue and
you know, what's a good entry point? Like, should I be buying if I could get in at the 30 billion? Should I be buying at the 45 billion? Because that's where it's trading at. Obviously, maybe a discount because you think it's worth less. I mean, what's the right entry point?
Yeah, I think with entry points, like the secondary price is really high and a lot of it is, a lot of it is Anduril being very tightly controlling of the stock. So, you know, tiny, like for the most part, it's tiny blocks of Anduril that are, that are actually moving at any given time. And so, you know, the price, the price has gone up dramatically as sort of
world events have conspired in Anduril's favor. know, the price around, and just looking quickly here at this graph, the price last October was $25 a share. So from last October through the election up until now, it's just been a steady increase to $60. A lot of that being just the constant drumbeat of, you know, election Pentagon budget.
these sort of contract wins that they've had, it's gone up to 60. I think that for me, $60 is a good entry point because if you can get it, then you're invested into the company that is sort of best positioned to, if anyone's going to become sort of the next prime, it would be Enderill, given the sort of momentum they've had on these contracts.
Yeah, 6 billion, who knows over 10 years, probably most of those, how that gets recognized. But the slope that they've had, the trajectory has been kind of insane. And then you can also look at Palantir's revenue multiple, right? I mean, they've been trading at like 70X. So if you look at that, what's that? I said totally. And this is another 8 % C. Joe Lonsdale investment like Palantir.
their first money in. You know, it's interesting.
If they get to the revenues like the other primes, we're talking like 40 to $100 billion of revenue, right? So if you fast forward and they're at 50, $100 billion of revenue, and if they have this technology and these more accelerated growth rates, I mean, we're potentially talking closer to half a billion to a trillion of enterprise value. I'm actually quite bullish.
I think it's crazy expensive, but it's one of those things that I do think like SpaceX, it's almost in a little bit of a monopoly position and it kind of is going to keep on getting fed, looks like, until they get more competition, which even when they get competition, it seems like the market might be big enough, especially across the world, to fulfill kind of the revenue expectations.
I guess what's like the downside? Like obviously you put bear here four billion, but give me the this falls apart and we go back to that 60 minutes and yeah, that was quite flashy. It didn't really work out the way we thought it would in terms of the expectations.
Yeah, yeah, I think, you know, one of the biggest sort of, you know, potentially bearish takes is a lot of these programs, you know, like the mixed reality goggles. Okay, they want a $22 billion contract to do do goggles. But, you know, can they can they sort of fulfill one of these like, giant kind of moonshot projects? And, you know, if they can't, I think a lot of the the, you know,
Anduril might be okay, but I think a lot of the narrative around the company might change. have kind of, so you have to have the execution risk, which I think is kind of standard. You have this kind of manufacturing issue too. So they just built this, you know, they're building this giant factory in Ohio to start producing their sort of jets, drones and other systems in the country. You know, if they can't sort of
figure out their own kind of supply chain and really scale this up to the level of a Boeing or a Lockheed or a Raytheon, are, you know, this is their specialty. You know, they have factories everywhere, all these congressional districts. So if you try to, you know, cut spend Boeing or Lockheed off and you run into that as a problem where their manufacturing is so embedded into so many different places in the country. Whereas Anduril on the other hand is a little more
because it's a little more on bleeding edge, it's a little more liable, I think, potentially to changing political winds too. mean, if we elected a a very diametrically opposed president in the next election, could things change in terms of their success with DOD? I think they have less kind of, they have less of a moat in terms of where they are in the budget than some of these other big defense primes do.
and the big primes are also working on a lot of this stuff. So, you know, they are competing and it remains to be seen kind of how well they'll continue to compete. But I think that's a big risk. In Europe, you know, they could completely turn against US technology and US budgets are pretty big, but that would be definitely definite drag. I think those are some of the, yeah, those are some of the big ones that come to mind.
We have some questions. So in terms of timeframe for IPO, there's definitely no visibility. It's kind of been coming pretty hot very recently. So I would not buy this thinking that there's a very obvious IPO in the near term. We're probably a couple to a few years out at least. And that's probably a minimum. Then in regards to the best platforms, like, yes, some of you want to buy now. I think that's a very interesting idea. Obviously, you need to think about your own considerations there.
We have lots of platforms that we've had on the podcast or others that have partnered with us. So there's plenty of platforms for you to choose or to follow up with. Here's an interesting question, Jan-Erik. Here's a prediction. If we could go to maybe if the slide is still available on the raises, which is they just raised their series G in February. Do you think there's going to be another raise or is that going to be an IPO?
Yeah, I would think that there will be more primary raises. think, you know, I'm sure Founders Fund is happy to keep shoveling money into this company, which keeps, you know, the markup keeps going up. I think, you know, the 2.5 billion dollar G has a lot to do with developing this factory in Ohio and ramping up production of the
you know, kind of AI fighter jet. I think they think of it now as kind of an AI co-pilot, but building towards the fully autonomous fighter jet and then the underwater submarine. So, you know, if I think about it, it's like the series G is sort of helping them start scaling up. But I would expect more rounds of private fundraising as they sort of really, you know, build out additional factories, continue to ramp that up.
rather than IPO because I think the revenue graph looks really good right now, but it's still fundamentally lumpy in nature because of the contracts that they're signing for different products. I would think that you would want to see these jets being produced in large volume, these underwater submarines being produced in large volume, other things being manufactured before.
you know, and a sort of reliable revenue ramp from that before they start going public or start thinking about it. I completely agree. I think in the spirit of the Databricks, the stripes, the Open AIs, these other SpaceX's, there's gonna be a lot more private rounds before the very, very, very expected obvious public round. So, yeah, there's gonna be another private round. And by the way, just look at these numbers. They go from
expensive to nosebleed very quickly over the last couple few years. So we're coming towards the end of our session here. If anybody has any, we just got some additional questions. All right, let's go lightning round and then we'll be done. You mentioned some of the other comps. Are there any others worth noting beyond the Helsing, Destinus, et cetera?
Yeah, well, there's a, we have a slide, I think in there of just some of the big, you know, where we mentioned a few, no, I didn't, I didn't put in this image, but there's a lot of these companies, you know, if you look in sort of US defense tech market maps, I think there's a lot of really interesting companies. One of them, and most of them are sort of point solution focused. So Shield AI, Shield AI is a big one that comes up around drones. You have Saronic,
Saronic around the sort of maritime, you know, underwater submarines, similar to what they're You have a bunch of companies in the sort of manufacturing side of it. So, you know, you can think of them as like the manufacturing arm of, you know, made in the USA defense tech. The biggest name is Hadrian on that front. yeah, there's a lot of really interesting US defense tech startups right now. There's been sort of a rush to build them.
in the years since Anduril. Speaking of which, we have a question. If defense tech becomes uncool again, because now it's so cool, does it lose its premium that it currently demands? The answer is absolutely. Absolutely. And that is definitely something that's happening right now. So you should take that into consideration as part of your diversification and as part of your long-term strategy. Next question is, I'm unaccredited. Where can I buy Anduril?
in the private markets, I think it's gonna very tough. think even if you're accredited or even if you're an institution, it's very difficult to get Anduril. So I think if you're unaccredited, I think those options are quite limited if available at all. So, all right. Well, that's all of the questions that we had. Any final thoughts Jan-Erik, on Anduril? I could talk about Anduril for hours. I think another thing that's really key and one of the things that stuck out to me when I first was looking at the company is that they reinvest
they reinvest 100 % of revenue for the most part in R &D. That's from a few years ago, but I believe it's still true. Like don't think this company is profitable or necessarily close. in contrast to 100 % of R &D, Lockheed spends 2 % of revenue on R &D. So 100 % versus 2%. I mean, this is just like, if you're excited about technology and...
you know, of techno optimism. It's one of my favorite companies to look at and sort of follow for that reason. Yeah, I would agree. I think it's very expensive. I would have preferred to get in earlier where there was less coolness and less premium and less minute shows. But all of that and Trump in office has made this quite expensive, but it's expensive for a reason because they're doing some really innovative things.
And the stuff they're doing today, I feel it's going to be very obvious and no brainers 10 years from now, we're going to say, yeah, of course this is the way it went. And Palmer Luckey and the Anduril team are leaning up the way there. I do think this company has a path to a trillion dollars. I do think it's higher risk. And if you could get in, it's very interesting. But I do think that it's so expensive today that if you're just looking for a quick win, you know, to flip it for a double or something, I think that's tricky without knowing what's going to actually happen in the private markets.
But if you're willing to hold for a while, I think it could be a big return or kind of like SpaceX. So those are my thoughts, obviously non-investment advice. Jan-Erik, thanks for joining. Great conversation. Thank you. I had a great time. All right. Bye, everyone.
