The Office of Strategic Capital (OSC) under the U.S. Department of Defense announced it had signed a $450 million conditional loan commitment to a U.S.-based unmanned aircraft system developer.
The commitment to Neros, Inc., is intended to support its domestic manufacturing expansion and reduce reliance on foreign-made components. The company develops and manufactures dual-use small, unmanned aircraft systems (sUAS), and is in the midst of adding private capital to support its planned expansion of vertically integrated domestic sUAS manufacturing capacity, as well as manufacturing ground control systems and critical components like motors, radios, flight electronics, sensors and batteries.
“Neros has already demonstrated an ability to design, manufacture, and deliver exceptional small unmanned aircraft systems,” David A. Lorch, director of the Office of Strategic Capital and Senior Advisor to Deputy Secretary of War Steve Feinberg, said. “OSC’s investment will turbocharge Neros’ ability to manufacture drones and components critical for the production of drone systems.”
The Torrance, CA-based company said the investment will allow it to onshore production of complete drone systems as well as their critical subcomponents. Further, the company said the “vertically integrated capacity will support both Neros’ internal production and the supply of critical, NDAA-compliant components to other U.S. and allied drone manufacturers.”
“Winning the drone industrial-base competition requires the United States to be able to manufacture complete systems at scale and at competitive prices for both military and non-military applications. This starts with bolstering the domestic supply of critical components inside all drone systems,” James R. Shanahan, Senior Managing Director (Investments) at OSC said. “Neros’ vertically integrated approach would support the creation of significant incremental domestic component capacity for Neros and the broader unmanned-systems ecosystem.”
As part of the conditional loan commitment, Neros must complete various steps including financial, legal, technical, investment, due diligence and other requirements. The loan commitment is for up to $450 million, and will not be final until those requirements are met, officials said.