U.S. defense startup Neros has raised $250 million at a $2.5 billion valuation, roughly tripling its previous valuation as it accelerates production of its Archer attack drone and Bandit interceptor drone. The round was co-led by Sequoia Capital and the American Strategic Technology Fund, with participation from existing investors including Peter Thiel Capital. Neros plans to use the funding to build mass-production infrastructure, expand its workforce to about 350 from roughly 200, support international expansion and help U.S. allies establish local manufacturing capacity. The company is targeting annual Archer production of 1 million units by 2028, up from current capacity of 65,000 units a year. The push comes as the U.S. Department of Defense increasingly turns to lower-cost autonomous systems from startups, aided by procurement reforms introduced late last year. Last month, the U.S. Army awarded Neros a five-year contract worth up to $500 million for Archer drones and related products, helped by the company's U.S.-based supply chain independent of China. Neros is also advancing Archer AI for autonomous target tracking and drone-to-drone coordination in GPS-jammed environments, and aims to field its Bandit anti-drone system within the year.