Pentagon Backs Neros With $450M Drone Loan
Neros will receive a conditional loan to boost local manufacturing of drones and essential parts, raising the total planned investment for the project to $615 million.
The U.S. Department of War’s Office of Strategic Capital (OSC) pledged up to $450 million in conditional financing to Neros, a California firm that builds small military drones. This funding aims to grow U.S. production of drones and key components, thereby lowering reliance on overseas suppliers.
The Department of War stated that the investment will enable Neros to scale up domestic manufacturing of small unmanned aircraft systems (sUAS), along with ground control systems, motors, radios, flight electronics, sensors, and batteries.
Neros plans to inject an extra $165 million in equity into the project, which raises the total planned investment to $615 million.
Building a Domestic Drone Supply Chain
This move aligns with the Trump administration’s Executive Order 14307, Unleashing American Drone Dominance, which aims to bolster domestic drone production.
Neros intends to grow its vertically integrated manufacturing base in Torrance, California. The expanded facility will manufacture complete drone systems alongside critical components such as propulsion motors, flight electronics, radios, and thermal sensors.
The new capacity will not only serve Neros but also other U.S. and allied drone manufacturers. The company intends to provide components that meet National Defense Authorization Act (NDAA) standards.
"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," said James R. Shanahan, Senior Managing Director (Investments) at OSC.
Neros Expands Military Drone Production
Neros produces the Archer line of small first-person-view (FPV) drones, built for military reconnaissance and strike roles. The product range includes compact drones for close-quarters use and larger models featuring autonomous targeting.
The company has already won major military contracts. In September, Neros revealed an order worth over $100 million for 14,000 drones and explosive payloads via the Pentagon’s Drone Dominance Program.
This financing supports a wider manufacturing expansion. Neros stated that the investment could enable the company to reach an annual production rate of one million drones by 2028.
The $450 million commitment is not yet a finalized loan. According to OSC, Neros must meet additional financial, legal, technical, investment, and due diligence conditions before the deal can close.
The announcement highlights a federal push to boost domestic drone manufacturing capacity, covering not just aircraft assembly but also the components required for large-scale production.