On December 5, 2025, Castelion announced a $350 million Series B funding round to mass-produce hypersonic missiles for the U.S. military. The investment, led by Altimeter Capital and Lightspeed Venture Partners, reflects growing concern that America has fallen behind Russia and China in developing Mach 5+ weapons.
The funding is the largest in the hypersonic sector to date, bringing Castelion’s total capital raised to over $450 million since its founding in 2022. The company was started by three SpaceX veterans who believe they can apply rapid development methods from the commercial space industry to defense manufacturing.
The Hypersonic Gap
China and Russia already have operational hypersonic weapons stockpiles, while the United States does not. Both adversaries have deployed hypersonic missiles capable of traveling at speeds exceeding Mach 5 while maneuvering to evade traditional missile defense systems.
A report by the Atlantic Council’s Hypersonic Capabilities Task Force warns that the gap poses a strategic risk. “The United States must accelerate development and production of hypersonic strike weapons to restore deterrence,” the October 2025 report states. Former U.S. defense officials are urging the Pentagon to scale up production to match the pace of Chinese and Russian deployment.
The concern has reached the highest levels of government. The global hypersonic missile market is projected to grow from $8.5 billion in 2024 to $30 billion by 2034, driven primarily by military demand.
Blackbeard: Castelion’s Answer
Castelion is developing a hypersonic strike weapon called Blackbeard. The company completed over 20 developmental test flights in under 18 months, a pace that traditional defense contractors rarely achieve. A September 2025 flight test in Nevada demonstrated the missile’s capabilities.
In October 2025, Castelion secured its first platform integration contracts from both the U.S. Army and U.S. Navy. The contracts will integrate Blackbeard onto Army and Navy launch platforms, bringing the weapon closer to operational deployment.
The U.S. Army requested $25 million in the FY26 budget for Blackbeard development under Project HX3. Pentagon officials have publicly backed the program as part of a broader effort to field affordable hypersonic weapons quickly.
The Defense Startup Boom
Castelion is part of a wave of defense technology startups attracting venture capital. Andreessen Horowitz, one of Castelion’s investors, has made defense tech a core focus area, highlighting the company in its “American Dynamism 50” list of companies shaping future conflicts.
The Pentagon has encouraged this shift, opening procurement pathways for non-traditional contractors. The Defense Department requested $3.9 billion in FY26 for hypersonic weapons programs, with a growing portion directed toward startups like Castelion.
Traditional defense contractors typically take a decade or more to develop new weapon systems. Castelion aims to deliver operational hypersonic missiles in a fraction of that time by using commercial manufacturing techniques, iterative testing, and vertical integration borrowed from the commercial space industry.
The company’s rapid progress has attracted attention from military planners concerned about the widening gap with peer adversaries. Whether Castelion can deliver on its promises remains to be seen, but the scale of investment suggests that both the private sector and the Pentagon believe speed is essential in the race for Mach 5 warfare.
