Castelion's $200 Million Navy Deal and the $500,000 Hypersonic Bet

The U.S. Navy awarded startup Castelion a contract worth up to $200 million in September for Blackbeard, a hypersonic missile the company says it can build for less than $500,000 each — while Tomahawks cost millions. That deal, plus a $13 billion valuation, has put the Torrance, Calif.-based startup in direct competition with Lockheed Martin for a weapons category America still doesn't field at scale.

Here's the gap Castelion is chasing. A hypersonic missile travels at least Mach 5, could cross the U.S. coast to coast in under 45 minutes, and — unlike ballistic missiles — flies low, maneuvers, and skirts radar. China and Russia have them. The U.S. doesn't, despite years of research costing billions, successful tests, and production struggles at the incumbents. "Humans have done it, just not Americans," Castelion CEO and cofounder Bryon Hargis said. "I firmly believe it's doable."

The war in Iran sharpened the stakes: the U.S. is firing missiles faster than it can replace them, by an order of years, per the source report.

How three SpaceX alumni got laughed out of the room

Hargis, Andrew Kreitz, and Sean Pitt founded Castelion in 2022. Hargis started the military satellite network Starshield; Kreitz ran classified finance; Pitt led Falcon 9 sales in Europe. Their first Pentagon pitch, to the Defense Innovation Unit over Zoom, flopped. "We explained 'we're here to make low-cost missiles.' They asked: 'Are you going to compete with Lockheed?' We said yes, and it was not a little laugh. There were a good number of people laughing," Pitt recalled.

It got threadbare fast. "I was using my retirement to fund my living," Hargis said. The founders promised to return investors' money if they couldn't raise $1 million — and cleared the bar via a SpaceX tender offer. In April 2023, Washington, D.C.-based Lavrock led a $5.6 million seed round, a shoestring for a missile-maker. The team built its first rocket motor in the Mojave Desert near Edwards Air Force Base, wearing Tyvek suits and respirators while mixing propellant.

The turning point was a video. A static-fire test, filmed by a high-speed cameraman, caught Andreessen Horowitz's attention and led to an $8.6 million seed extension. Then the Navy stepped in. "[The Navy] gave us that initial contract, $3 million. We did what we said we would for $3 million. That led to a $15 million contract, and it all went from there," Pitt said.

What does the program of record change?

In under two-and-a-half years, Blackbeard went from drawing to a coveted government budget line. That designation separates Castelion from the typical defense-startup graveyard. Lockheed's rival Dark Eagle, in process since 2017, is reportedly three years behind schedule. An Army spokesperson countered: "Dark Eagle has successfully deployed in support of Indo-Pacific exercises and completed multiple flight-test events."

Blackbeards have completed test flights on F/A-18 Super Hornets. Castelion is racing to open a 1,000-acre site in Rio Rancho, N.M. — Project Ranger — that could eventually produce thousands of missiles per year. Headcount has jumped from 159 at the end of 2025 to over 400. "This is going to be the defining production site for Castelion," Kreitz said. "We want this to be safe. We want this to be done correctly." Some residents have balked at the factory; the company has held community meetings and moved its chief engineer to town.

The company now holds over $500 million in U.S. government contracts, but the bet is binary: a reverse Anduril, barreling into one massive problem rather than building a product suite. "The pure existence of Castelion as a credible threat to the primes significantly benefits the country, because behavior has to change to deal with a competitive entrant that's offering services at a significantly lower cost," Pitt said.

The founders frame the urgency in generational terms. "This is the capability that will define warfare in the 2030s and beyond," Kreitz said. Hargis points to Apollo-era iteration — "build hardware like there was no tomorrow, test it, fly it, iterate and do it all again" — as the approach America abandoned. Pitt's bar going forward: "Can you make enough? Are they cheap enough that the country can buy that many? And can you do that in a time frame of relevance?"

"We're in a sprint," Kreitz said. "We're going as fast as humanly possible... We have to act as if it's tomorrow."