Thiel-backed start-up to mass-produce ‘deep strike’ missiles in Europe and US

{"text":[[{"start":7.58,"text":"A defence start-up whose backers include US tech billionaire Peter Thiel’s Founders Fund is building a trio of factories in the US, Germany and Israel to mass-produce long-range weapons designed to counter threats from China, Russia and Iran."}],[{"start":22.12,"text":"Washington-based Covenant told the FT it was emerging from two years in secretive “stealth mode” as it seeks to disrupt the western defence market with its Anthem “deep strike” munition."}],[{"start":32.9,"text":"Anthem is intended as a cheaper alternative to weapons such as US-made Tomahawk cruise missiles, which have a 1,600km range but cost several million dollars each and are in short supply because of production bottlenecks and the war in Iran."}],[{"start":47.08,"text":"Covenant is “relentlessly focused on two things: low cost and high producibility” using readily available components, co-founder and chief executive Michael Kaufman said in the company’s first media interview. He added that the aim was “to deliver deep precision-strike solutions for Europe, the US and allies”."}],[{"start":64.56,"text":"The start-up, which is also backed by a venture capital firm founded by an adviser to Israeli Prime Minister Benjamin Netanyahu, has already taken over sites in Dallas and Leipzig and has a third location in Israel, with production at all three due to begin early next year."}],[{"start":null,"text":"

"}],[{"start":80.32,"text":"Covenant aims to produce 1,000 Anthem missiles a year at each of its German and US plants in 2027, and 5,000 a year at each site from 2028."}],[{"start":90.72,"text":"It said each weapon would cost in the “mid six-figure” euros — a fraction of the price of Tomahawks, which are sold to overseas governments for roughly $4mn-$6mn apiece."}],[{"start":101.4,"text":"Covenant’s public entrance to the global defence scene comes as the US and its allies in Europe and the Indo-Pacific region strive to obtain long-range weapons or bolster their existing stocks."}],[{"start":112.28,"text":"Donald Trump’s war in Iran has severely depleted US stockpiles of Tomahawk missiles, which are made by Raytheon at a current rate of just 60 a year, although the US defence group last month struck a $23bn deal with the government to increase the annual output to 1,000."}],[{"start":128.96,"text":"Governments in Europe are also seeking to procure or develop ground-based long-range weapons capable of striking Russia from European soil after decades of relying on the US for such capabilities."}],[{"start":140.72,"text":"Kaufman, a 36-year-old US-Israeli citizen who previously worked at Thiel’s hedge fund Thiel Macro and his private investment firm Thiel Capital, founded Covenant in 2024. His co-founder was Ofir Dayan, a former system chief engineer for the Iron Dome air defence system made by Israel’s Rafael Advanced Defense Systems."}],[{"start":162.28,"text":"Kaufman said the pair were inspired by the rapid innovation in small tactical weapons such as drones that proliferated in the conflict in Ukraine. But he wanted to create a “war-winning” munition that could tip the balance in a conflict."}],[{"start":175.92,"text":"“Our mission was to deliver a strategic weapon affordably in huge quantities to help the west deter its adversaries,” he said."}],[{"start":184.28,"text":"Several companies are hoping to disrupt a missile market traditionally dominated by established defence players such as Raytheon, Lockheed Martin and Europe’s MBDA. They include US defence tech company Anduril, Dutch start-up Destinus and Fire Point, the Ukrainian maker of the long-range Flamingo missile."}],[{"start":202.72,"text":"Covenant declined to state the range of the Anthem, citing customer confidentiality. But Kaufman said the concept was partly a response to a German-British plan to jointly develop “deep precision strike” weapons with a range of more than 2,000km."}],[{"start":null,"text":""}],[{"start":217.16,"text":"“We have designed Anthem to answer the Russia threat, the China threat and the Iran threat,” said Abby Denburg, Covenant president and chief growth officer. “That demands a certain range requirement and the ability to hit critical cities.”"}],[{"start":231.56,"text":"Anthem will carry a warhead weighing up to 250kg, the company said — little more than half the 450kg payload of a Tomahawk. But Covenant said the lower cost and ability to be produced at scale would allow militaries to fire large barrages of the missiles to “saturate” targets such as weapons factories or military bases."}],[{"start":251.84,"text":"The company said it had booked orders worth roughly €130mn so far. They include two initial contracts with the US government, one to trial its products with the army and a second with the navy to develop a maritime version of Anthem."}],[{"start":266.52,"text":"Germany, which is leading a European rearmament drive in response to Russia’s full-scale invasion of Ukraine in 2022, is considering procuring Anthem, according to a senior government official."}],[{"start":278.48,"text":"Covenant declined to say whether its product should be classified as a cruise missile or a long-range drone — categories that have become increasingly blurred."}],[{"start":286.6,"text":"“Nomenclature is in the eyes of the beholder,” said Denburg, who previously spent eight years at Boeing and its drone subsidiary Insitu. While different potential customers used different terminology, she added, “we consider it a deep precision-strike munition”."}],[{"start":302.2,"text":"The company said it had carried out more than 200 trial flights of Anthem with customers including the US military."}],[{"start":null,"text":""}],[{"start":308.96,"text":"Covenant is likely to face questions in Europe about its US links at a time when the continent is seeking to reduce its dependence on critical American technology amid deeply strained relations with Trump."}],[{"start":320.52,"text":"Kaufman and Denburg insisted it was a “truly global defence company”, adding that its German entity would be independent and have an “almost entirely” European supply chain. About 5 per cent of components and subcomponents are non-European, the company said, while none are from the US."}],[{"start":336.9,"text":"The start-up’s investors may also attract scrutiny."}],[{"start":340.12,"text":"Covenant’s backers include Founders Fund, the venture capital firm co-founded by Thiel, who has close ties to Trump and is a vocal sceptic of liberal democracies. It has also won backing from Andreessen Horowitz and 8VC, both of which have ties to the US president, as well as Israeli venture capital firm Aleph, whose co-founder and partner Michael Eisenberg is an adviser to Netanyahu on Gaza and the US."}],[{"start":364.56,"text":"Its other VC backers are Altimeter, Lightspeed and Lux Capital, which has ties to the Democratic Party."}],[{"start":370.64,"text":"“None of those investors are involved in the day-to-day decision-making of Covenant,” Kaufman said. “Covenant takes confidentiality provisions with our customers incredibly seriously, and that includes not sharing anything with investors that our customers would not want or allow us to share.”"}],[{"start":385.74,"text":"A person familiar with the details said that Founders Fund had a minority stake and no seat on the board."}],[{"start":391.76,"text":"Covenant has raised about $250mn, with its latest funding round valuing the company at more than $1bn."}],[{"start":404.96,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1788955739_7917.mp3"}