Michael Kaufman's Covenant opens Dallas missile factory, targets 1,000 Anthems in year one
The former Thiel Capital investor is betting commercial parts, three-country production and $250M can turn flight tests into missile volume.
By RuntimeWire Staff · Published
Primary source: CNBC
Why it matters
Kaufman is using $250M in venture funding to build missile capacity ahead of full qualification. If Covenant delivers, defense founders gain a stronger case for financing factories before procurement catches up.
Covenant, the Washington-based defense manufacturer co-founded in 2024 by former Thiel Capital investor Michael Kaufman and Avihood Ben-Ari, opened a 105,000-square-foot missile factory in Dallas on September 9.
The company disclosed $250M raised across three rounds from Andreessen Horowitz, Founders Fund, Lux Capital, 8VC, Aleph and Lightspeed. The company says Dallas will begin serial production in the first quarter of 2027, with first-year output of 1,000 missiles and an eventual annual target of 5,000, according to CNBC's report.
Kaufman, a U.S.-Israeli national who served in the Israel Defense Forces, previously worked in U.S. investment management, including at Thiel Capital. His path from investment management to missile production reflects Covenant's larger wager: commit venture capital to factories and suppliers before military qualification and procurement are complete.
The factory is the product bet
Anthem is a ground-launched, long-range cruise missile carrying a payload of more than 200 kilograms, according to Reuters reporting. A solid rocket motor launches the weapon before a heavy-fuel jet engine takes over for cruise flight.
Kaufman's founding argument is centered on cost and production volume. He told Reuters that large defense contractors produce comparable weapons in limited quantities at high prices. Covenant designed Anthem around commercial off-the-shelf parts, multiple suppliers and manufacturing processes intended to produce missiles in the thousands.
Covenant has not published Anthem's precise range, guidance architecture or mature unit cost. Reuters reported that Covenant is targeting a mid-six-figure price once production reaches scale, while the manufacturer describes the price only as a fraction of comparable legacy systems. Those economics will depend on Covenant reaching the production rates it is promising.
The supply chain is therefore as important as the airframe. Covenant told Reuters it has arranged three solid-rocket-motor suppliers, with a fourth in development, and secured agreements covering more than 4,000 jet engines over the next two years. Avoiding a sole-source bottleneck is a practical response to one of the defense industry's recurring problems: a missile cannot leave the factory when a single specialized component is late.
Covenant has also built mission-planning and command-and-control software for coordinated launches, according to Reuters. The software helps position Anthem as a complete strike system rather than a missile sold without the tools required to plan and manage missions.
Flight tests have moved faster than procurement
Covenant has reported more than 200 Anthem test flights, according to the company's original announcement, although the supplied materials do not establish a confirmed production order. An August 6 live-fire demonstration near Tan-Tan, Morocco, provides an independently documented example of the test program.
The Army agreement is intended to accelerate testing and qualification, while the Navy agreement covers adapting Anthem for maritime use. The supplied materials do not establish whether either agreement includes funded procurement or how many missiles are covered.
That distinction defines the risk Kaufman is taking. Covenant is opening factories and securing component capacity before the U.S. military has completed qualification or published a large production award for Anthem. By building capacity before a traditional program of record, Covenant accepts more capital risk in exchange for an earlier manufacturing base.
A three-country production plan
Covenant operates production facilities in Germany and northern Israel and employs more than 200 people worldwide, according to CNBC.
The international footprint gives Covenant access to allied suppliers and customers, while creating a harder operating problem than a single domestic factory. Missile components, export approvals, quality controls and customer requirements have to remain consistent across three jurisdictions.
Covenant executives told Reuters they expected an international customer to begin receiving German-built Anthems by the end of 2026, with U.S. Army deliveries expected in 2027. Those dates are company forecasts, and the supplied materials do not establish a confirmed production order.
Venture capital is financing the production race
Covenant is entering a heavily funded race to prove that venture-backed manufacturers can build strategic weapons faster and in greater numbers than the traditional procurement system.
Anduril is pursuing a similar manufacturing thesis with its Barracuda family. In August, Castelion announced a $1B Series C to expand production of its Blackbeard hypersonic weapon. In June, RuntimeWire reported that Founders Fund and Sequoia backed German loitering-munitions manufacturer Stark Defence at a reported 3.5 billion euro valuation.
The systems differ technically. Their financing reflects a shared investor judgment that private capital can pay for factories, testing and supplier commitments before government procurement catches up.
Covenant now has to convert that financing advantage into repeatable production. Covenant has raised the money, assembled facilities and flown Anthem. Its next milestone is delivering qualified missiles at the cost and production rate it has promised.