Hypersonic defense technology startup Castelion is advancing rapidly with a major $350 million Series B investment round led by Lightspeed Venture Partners and Altimeter Capital, signaling growing confidence in its mission to modernize military hardware production. The funding follows a $100 million Series A earlier this year and positions the company to scale operations amid intensified global demand for cutting-edge defense systems.
Founded by former SpaceX leaders, Castelion aims to disrupt traditional defense contracting by applying rapid iteration, vertical integration, and cost-efficiency strategies reminiscent of SpaceX’s success in aerospace. The company’s focus on hypersonic missile systems—capable of exceeding Mach 5 speeds—comes as U.S. defense officials raise concerns about adversaries outpacing domestic capabilities.
“The Army’s fiscal 2026 budget request includes $25 million for Project HX3, targeting the development of Castelion’s Blackbeard GL hypersonic weapon. Designed as an affordable alternative to existing systems, the missile promises 80% of the capability of prime contractors’ offerings at a fraction of the cost.”
Recent milestones include a successful hypersonic vehicle test in March 2025 and critical Department of Defense partnerships with organizations like the Air Force Research Laboratory. The company’s progress has now materialized in concrete government support, with prototype demonstrations planned for early 2026 under Project HX3.
If initial testing succeeds, Castelion will proceed to Phase II of the Army contract—delivering 10 prototype missiles in 2027 for integration with the High Mobility Artillery Rocket System (HIMARS) and next-generation autonomous launchers. This positions the startup to compete directly with established defense giants like Lockheed Martin and Raytheon, offering the Pentagon a faster, leaner alternative for maintaining technological supremacy.
The hypersonic arms race continues to accelerate, with Castelion’s private-sector approach challenging traditional development timelines. As global security dynamics evolve, the company’s ability to deliver scalable, cost-effective solutions could reshape modern warfare strategies and defense procurement practices.
