---
title: Pentagon Commits to Lend Up to $450 Million to Neros, Maker of the Archer Drone
description: The Office of Strategic Capital's second drone-maker loan in three months would fund Archer drones and parts like motors, radios and batteries in California.
author: Darie Nani (Editor-in-Chief)
date: 2026-11-07T13:28:41.544Z
updated: 2026-11-07T13:28:41.563Z
canonical: https://www.sovereignmagazine.com/article/neros-archer-drone
image: https://cdn.nanimediahouse.com/neros-archer-drone-osc-loan-529114.webp
categories: Business
content_type: News
region: United States
publication: Sovereign Magazine
schema_type: Article
---

The Department of War's Office of Strategic Capital has committed to lend up to $450 million to Neros, the Torrance, California company that makes the Archer, a small first-person-view (FPV) attack drone. The conditional commitment, announced on November 2, is the office's second to a drone maker in three months, after its $820 million commitment to Performance Drone Works on July 31.

[Congress set up the Office of Strategic Capital to lend to companies making technologies with both military and civilian uses, rather than to buy equipment from them.](https://www.sovereignmagazine.com/article/pentagon-820-million-drone-component-loan) Since mid-June it has announced 11 conditional commitments worth about $6.3 billion in all, including $1.4 billion for battery materials maker Sila Nanotechnologies and $500 million for rare earth processor Phoenix Tailings.

Neros says it is putting $165 million of its own equity into the expansion, bringing the total project to $615 million, and that the deal gives "the American taxpayer an ownership stake in the company." Neither Neros nor the department has published the loan's terms. Before financial close, the department said, Neros must still meet "various financial, legal, technical, investment, due diligence and other requirements."

## Neros Plans to Supply Motors, Radios and Batteries to Other Drone Makers

The department said the financing would expand Neros's manufacturing in Torrance to cover complete drones, ground control systems and the parts inside them: motors, radios, flight electronics, sensors and batteries. Neros would use that capacity for its own production and for "the supply of critical, NDAA-compliant components to other U.S. and allied drone manufacturers," the department said, and it tied the loan to President Donald Trump's executive order on "Unleashing American Drone Dominance."

"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," said James Shanahan, a senior managing director for investments at the office. "This starts with bolstering the domestic supply of critical components inside all drone systems." David Lorch, the office's director, said the money "will turbocharge Neros' ability to manufacture drones and components critical for the production of drone systems."

Neros describes its manufacturing base as Millennium One, a 250,000-square-foot facility in Los Angeles that it said in February it would occupy in early 2026, with research, engineering, testing, in-house components and assembly under one roof. The company says it became the highest-output American drone manufacturer in 2025 while working from a 15,000-square-foot space, and that it is raising its capacity 100-fold and designing Millennium One to supply components and licensed technology to other domestic manufacturers, with Neros as the anchor customer.

"This capital puts Neros on the path to one million drones per year by 2028," Soren Monroe-Anderson, Neros's chief executive and co-founder, said of the loan. Neros says that output would span long-range strike, close-quarters combat and interceptor drones.

## Neros Makes the Archer in 5-Inch and 10-Inch Models and an Autonomous AI Version

The smallest Archer, the 5-inch model, is a compact airframe for confined and indoor spaces that also serves as a training drone, with a range of 13 kilometers and a top speed of 74 mph. The 10-inch model is built for distance: 36 kilometers of range, a top speed of 80 mph and 48 minutes of flight time.

The Archer AI carries payloads of up to 7 pounds and has terminal guidance: the drone flies on to a target the operator has selected even if the control link is lost. Neros gives its range as 35 kilometers with no payload and 13 kilometers with a full 7-pound load, and says it is NDAA compliant and Blue UAS certified.

"The vast majority of feedback driving our product design comes directly from our operations in Ukraine," Neros wrote in February, when it said it was expanding its presence in Kyiv this year.

## Neros Raised $250 Million in August to Add Autonomy and Build an Interceptor Drone

On August 11 Neros raised $250 million in a Series C round at a post-money valuation of $2.5 billion, co-led by Sequoia Capital and the American Strategic Technology Fund. Neros is using the money for more autonomy in the Archer AI, including a position hold that works without GPS, and for Bandit, an interceptor drone designed to stop other drones in flight. Neros says Bandit is "intended to counter Class 2 and 3 drone threats including Shahed-style systems," and that both programs will be deployed in combat by the end of 2026.

## Neros Has Won Orders in Both Pentagon Drone Dominance Rounds So Far

The Pentagon buys small attack drones through competitions it calls gauntlets, held roughly every six months under its Drone Dominance program, which it describes as ["an iterative $1 billion plan to purchase small, lethal drones over the next two years."](https://dronedominance.mil/) It intends to buy more than 200,000 drones through the program by 2027.

In the first gauntlet, in February, the Pentagon picked 11 companies to deliver 30,000 drones, and Neros received orders for 4,960, toward the top of the range. On September 30 Neros announced a Gauntlet II order for 14,000 Archer AI and Archer 5-inch drones and explosive payloads, valued at over $100 million, plus 800 more drones from the first round "reallocated from other competitors who could not meet the production deadline."

## Drone Makers Want Steadier Orders as the Army Tries to "Artificially Induce" Demand

Drone Dominance awards do not guarantee future orders. Jon Strzelec, the advanced manufacturing lead for small drones at Army Materiel Command, said in October that the department is trying to "artificially induce" demand signals. "We're trying to force a supply chain to stand up within the country, and so there's a lot of companies that say, there's just not enough demand for me to invest in that," he [told Breaking Defense](https://breakingdefense.com/2026/10/is-the-pentagons-demand-signal-for-drones-working-it-depends-on-who-you-ask/).

James Slider, chief executive of Performance Drone Works, which received the office's first drone-maker commitment in July, told the outlet the industry wants steadier buying. "There's a lot of positive signaling, but we need to see the whites of the eyes: We need to see sustained, normalized demand," he said. "If you win an award and then you're providing 1,000 drones a month for a year, that's a very healthy demand for us."

The Pentagon outlined nearly $55 billion for its autonomous-warfare initiative in its 2027 budget, but requested most of it through a reconciliation package, which leaves the money's future uncertain.

Find out more about Neros at [neros.tech](https://neros.tech/).

## FAQ

**Q: Who makes the Neros Archer drone?**
Neros, Inc., a company in Torrance, California, co-founded by its chief executive Soren Monroe-Anderson. The Archer comes in 5-inch, 8-inch and 10-inch versions, each with a strike variant, plus the autonomy-enabled Archer AI, which Neros pairs with its Crossbow ground control system.

**Q: Where is Neros drone located?**
In the United States, the Department of War places the loan-funded expansion at Neros's Torrance, California facility, and Neros calls Millennium One in Los Angeles its manufacturing facility and next headquarters. Abroad, Neros said in February that it would begin producing Archer FPV drones in the Asia-Pacific region in 2026 with local partners, having qualified suppliers to build them entirely from First Island Chain components.

**Q: Who owns Neros drones?**
Neros is privately held and venture backed. Its $250 million Series C in August was co-led by Sequoia Capital and the American Strategic Technology Fund, with Interlagos, Valor Equity Partners, Allen & Company, Thiel Capital, Spark Capital and Dylan Field also investing. Neros has not published a full ownership breakdown.

**Q: Who has the best military drones in the world?**
There is no single ranking. The Pentagon tests small attack drones head to head in its Drone Dominance gauntlets, flown by military operators, and orders from the companies that perform. Neros says it is the only manufacturer to have placed in the top three in both the deep strike and close quarters battle missions with the same drone platform.